Some of our favorite recent tax fraud cases.
Atlanta: The Georgia Department of Revenue has executed four search warrants relating to the tax prep business “Tax Connection Worldwide” and arrest warrants have been issued for owner Rainnessia Stiggers and her accomplice, Robert Barrett.
The Department of Revenue opened a criminal fraud case in early 2014 involving fraudulent returns during the 2011, 2012 and 2013 tax years, during which time Stiggers and Barrett allegedly devised a scheme involving filing Schedule As containing inflated deductions for unreimbursed employee expenses, medical and dental expenses and gifts to charity; filing Schedule Cs containing false businesses with inflated losses; and utilizing counterfeit W-2s to support filed state returns. The scheme also involved false education credits and questionable dependents, authorities said.
Criminal charges include five counts each, one count of ID theft, one count theft by taking, one count theft by deception, one count computer forgery and one count 1st-degree forgery. Additional charges are expected. Stiggers is in custody; Barrett remains at large.
Little Rock, Ark.: Preparer Christopher T. Craig, 48, has been sentenced to 46 months in prison and a year of supervised release and been ordered to pay $1,092,177.79 in restitution to the IRS after pleading guilty last summer to two counts of aiding and assisting in the preparation of fraudulent income tax returns.
According to court documents, Craig prepared false employment returns on behalf of other taxpayers for tax years 2010 and 2011. Unknown to the clients, he filed the returns in a way that reduced the amount of taxes owed to the IRS. Craig then collected tax payments from the taxpayers for the correct amount and skimmed the difference between the amount owed and the amount paid to the IRS.
Craig’s fraud affected more than 50 victims and cost the federal government $1,092,177.79.
Charlotte, S.C.: Preparer Malik Shropshire, 43, has pleaded guilty to conspiring to file false returns and lying on a loan application.
According to court documents, from 2010 and through 2012 Shropshire and his conspirators recruited individuals to have returns prepared, promising large refunds. For tax years 2008 through 2011, Shropshire aided and assisted in the preparation of hundreds of false federal returns including, among other falsehoods, phony Schedule C businesses, dependents and refundable education credits. The taxpayers received inflated refunds and qualified for the EITC.
Shropshire pleaded guilty to one count of conspiracy to impede the IRS and one count of making a false statement on a loan application. The maximum for the conspiracy charge is five years in prison and a $250,000 fine; the maximum for the false statement on a loan application is 30 years in prison and a $1 million fine.
Last October, Nkhenge Shropshire, co-conspirator and Shropshire’s sister, received 33 months’ prison for her participation in the scheme (Accounting Today).
Baton Rouge, La.: Area resident Ta’sha Thomas has pleaded guilty to access device fraud and aggravated ID theft and to selling the IDs to preparer Mona Hill, who last year was sentenced to 65 months in prison. Thomas admitted to gaining access to personal IDs in the database at her work at the Ascension Parish Health Unit and to selling more than 400 of them to Hill between January and August of 2012 for $8,000 to $9,000. Hill used the information to file fraudulent federal tax returns, ultimately receiving more than $400,000 based on such returns.
Davenport, Iowa: Tax preparer Gregory Scott Alcala has been charged in connection with filing false returns and diverting clients’ refunds to his own bank account, according to published reports.
An indictment reportedly alleges that from 2012 to 2014 Alcala prepared accurate returns for clients that the latter believed were filed with the IRS. Instead, according to news outlets, Alcala altered the filings, allegedly with false business expenses, to inflate refunds, and funneled the additional amounts to his account.
The indictment also reportedly alleges he made a bomb threat over the phone in 2013 to an insurance company representative.
York, S.C.: Former preparer Anthony Kennedy, 59, has reportedly pleaded guilty to six counts of forgery, four counts of financial ID fraud and two counts of shoplifting, partially in connection with using financial information of some of his clients to withdraw money from their accounts.
Kennedy committed his financial crimes in July, August and September of last year, according to authorities cited in news reports, using checks that belonged to his brother and financial information of several people for whom he had previously prepared taxes. Kennedy reportedly presented that information to various Rock Hill banks to take out $3,270 in transactions.
The two shoplifting charges for Kennedy stemmed from thefts of meat and rifle scopes at a local Wal-Mart in May, reports said, adding that he has since been arrested for two more shoplifting incidents.
Kennedy was sentenced to seven years suspended to five years active time, followed by two years of probation, reports said, adding that the probation might be terminated early if Kennedy pays back more than $3,200 restitution to three banks.
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