Poor Quality; for king and country and cash; a penny saved; and other highlights of recent tax cases.
Raytown, Missouri: Tax preparer Godwin Omoregie, 71, has pleaded guilty to filing false returns.
Omoregie owned and operated Quality Property Management and Tax Services from 2012 through 2022 and admitted that he prepared federal income tax returns that contained materially false and fraudulent items for at least 10 individuals. This resulted in at least 42 false income tax returns from 2017 through 2021, manufacturing substantial undeserved refunds.
The tax loss is some $178,702.
Omoregie also admitted that he filed a federal income tax return in March 2022 that did not include at least $20,883 from his tax prep business. The total tax loss associated with Omoregie's false returns from tax year 2017 through 2021 is $62,891.
He faces up to six years in prison.
Woodland Hills, California: Two brothers have been found guilty of fraudulently obtaining hundreds of thousands of dollars in federal tax refunds, some of which they then laundered through bank accounts in the United Kingdom.
Victor A. Ohiri and Stephen O. Danielson-Ohiri have been found guilty of one count of conspiracy and 10 counts of theft of government property.
From March 2014 to March 2015, the brothers, together with others in the U.K., conspired to use the Ohiris' U.S.-based bank accounts to fraudulently obtain hundreds of thousands of dollars of federal income tax refunds. The conspirators filed nearly 20 fraudulent returns with the IRS in the names of victim-taxpayers whose IDs they had stolen. The conspirators used fake documents, such as bogus W-2s, to file fraudulent returns that requested large tax refunds, often $8,000 to $10,000.
Based on the fraudulent returns, the IRS issued refunds that were electronically transmitted not to the victim-taxpayers but to bank accounts controlled by the two brothers. The Ohiris then wired most of the money to conspirators in the U.K. and withdrew the rest in cash for themselves.
Some $340,000 in federal refunds was deposited into accounts controlled by the Ohiris. IRS investigators seized some $181,000 from two of Stephen Ohiri's accounts.
Sentencing is Oct. 2. Victor Ohiri faces up to 115 years in prison; Stephen Ohiri faces up to 60 years.
North Easton, Massachusetts: Cleber Gomes Pecanha, owner of a concrete company, has agreed to plead guilty to a multiyear scheme to underreport income on his tax returns.
According to the charging document, Pecanha cashed customer checks and did not deposit the receipts in his business bank accounts. He did not tell his tax preparer that he was cashing large numbers of checks from customers and only gave the preparer his bank statements as support for his tax filings.
Pecanha underreported income from the business on his personal returns, resulting in an income tax loss of more than $1,862,033 for tax years 2017 to 2021. He used the money from his scheme to fund an off-the-books cash payroll.
The charge of tax evasion provides for a sentence of up to five years in prison, up to three years of supervised release and a fine of $250,000, or twice the gross gain or loss, whichever is greater.
Minneapolis: Tax preparer Sue Yang, 48, of Circle Pines, Minnesota, has been sentenced to a year and a day in prison, to be followed by a year of supervised release.
Yang, who
The IRS notified Yang repeatedly that his failure to resolve his tax obligations would result in sanctions, including suspension of his EFIN or expulsion from the e-file program. In August 2012, Yang was suspended from the program.
From August 2012 through April 2022, he operated surreptitiously as an e-filing preparer, disguising his unauthorized participation in the program by enlisting others to obtain EFINs that he then used to file thousands of returns electronically for clients. From 2012 through 2020, Yang also impeded the IRS suitability review and circumvented his suspension by electronically filing more than 26,000 returns using misappropriated EFINs.
From 2018 through 2021, Yang received some $765,000 in compensation from working as a preparer but did not report any income related to his tax prep business.
His crimes resulted in a combined federal tax loss of some $214,297, an amount Yang is ordered to pay in restitution.
Bow Mar, Colorado: Businessman Frank Stevens has been sentenced to 15 months in prison for evading more than $700,000 in federal employment taxes.
Stevens co-owned restaurants and an oil production business. Starting around 2002 and continuing for many years, he did not pay over payroll taxes to the IRS or file the required quarterly employment tax returns for his businesses after withholding taxes from employees.
Failing to collect from the businesses, the IRS assessed the tax against Stevens personally. Stevens responded by keeping the balances of his personal and business bank accounts low, often leaving them with only one cent. Stevens transferred or directed employees to transfer just enough money to cover expenses and then moved any remaining money to a bank account not subject to IRS levy.
Stevens caused a total tax loss of some $737,128.
He was also ordered to serve three years of supervised release and to pay a $10,000 fine and $1,096,138.14 in restitution to the United States.
Sarasota, Florida: Restaurateur Karl Knocker has pleaded guilty to three counts of failing to provide information to the IRS relating to his income tax liability.
Beginning at least as early as August 2013, Knocker and his partner and co-owner of the restaurant, Madeline Nikolson, schemed to remove the records of daily cash sales from point-of-sale registers at the restaurant, leaving the record to consist only of credit card sales. The owners kept the true record of their sales and income secret and did not disclose it to the IRS. The two provided this falsified record of sales income to tax preparers who prepared both their personal income tax returns and their corporate returns for tax years 2016, 2017 and 2018.
As a result, they falsified and removed any reference to approximately $726,105 in sales income from their corporate and personal tax returns for those tax years, resulting in over $100,000 of taxes due and owing.
Nikolson previously pleaded guilty for her role in this case. Her sentencing is Aug. 1.
Knocker faces a maximum of three years in prison.
