Tax Fraud Blotter: Cover their assets
Fake financial instruments, 26 states and $9 million, and other highlights of recent tax cases.
San Diego: Preparer Marla Lynn Cunningham was sentenced to 37 months in prison for preparing fraudulent returns.
According to court documents, Cunningham owned and operated Cunningham’s Tax Service in El Cajon, Calif., and from 2010 through 2012 prepared fraudulent returns for her clients that reported fake business losses, charitable contributions, and medical, dental, education and unreimbursed employee expenses.
Cunningham, who pleaded guilty in December to three counts of preparing false tax returns, caused a tax loss of approximately $1,237,943.
She was also ordered to serve a year of supervised release and will be ordered to pay $91,867 restitution to the IRS.
Gulfport, Miss.: Two preparers have been sentenced to prison for charges related to preparing fraudulent returns.
Allen Brice was sentenced to 63 months in prison after being convicted of seven counts of aiding in the preparation of false returns, while Jeremi Washington was sentenced to 46 months in prison after pleading guilty to conspiring to defraud the United States.
According to court documents and proceedings, Washington was a preparer who owned and operated Flash Financial, and Brice was Washington’s sole employee. From 2009 through 2011, the two filed fraudulent federal returns for multiple clients that included bogus education expenses and retirement contributions, which they never discussed with their clients and which inflated undeserved refunds.
Brice and Washington were also ordered to serve term of supervised release. Brice was ordered to pay the IRS $1,919,820.20 restitution. Washington was ordered to pay $1,954,352.
Hillsboro, Ore.: Promoter Winston Shrout, 69, has been convicted of making, passing and submitting fake financial instruments to a financial institution and the U.S. Treasury and failing to file returns.
According to the indictment and trial evidence, from approximately 2008 through 2015 Shrout, formerly of St. George, Utah, created and submitted more than 1,000 bogus financial instruments with the intent of defrauding financial institutions and the U.S. Treasury. He held seminars and private meetings to promote and market the use of these fake financial instruments to pay off debts, including federal taxes. Shrout also sold recordings of his seminars, templates for fake financial instruments and other materials through his Web site.
Evidence trial also proved that Shrout failed to file his 2009 through 2014 tax returns despite earning $562,224 from presenting at seminars, licensing fees associated with the sale of his products and annual pension payments.
Sentencing is Aug. 1, when Shrout faces a maximum of 25 years in prison for each count of making a fake financial instrument and one year in prison for each count of failing to file a return. He also faces supervised release, restitution and monetary penalties.
Lafayette, La.: Prep business owner Kevin Dalcourt, 49, has pleaded guilty to filing a false return and not paying more than $350,000 in taxes.
According to the plea, Dalcourt was a preparer who owned and managed Kevin’s Tax Service. He was jailed in 2010 on non-tax related charges but continued to manage his prep business. Before his incarceration he trained his staff to use false information in clients’ returns to inflate refunds.
His wife, Tamiko Dalcourt, helped run the tax service from 2010 to 2013 while her husband was in prison. Tamiko Dalcourt pleaded guilty to a misdemeanor charge of failing to file the couple’s 2012 joint return.
Kevin’s Tax Service was highly profitable but Kevin Dalcourt did not report his income to avoid paying taxes for tax years 2009 to 2011, failing to pay an estimated $356,426.78 in taxes for those years.
He has pleaded guilty to one count of making and subscribing a false return, and at his July 21 sentencing faces three years in prison, one year of supervised release, restitution and a $250,000 fine. Tamiko Dalcourt pleaded guilty in March to one count of willful failure to file a return, supply information or pay tax. She faces a year in prison, a year of supervised release and a $100,000 fine.
Irvine and Newport Coast, Calif.: Three Orange County residents have been sentenced to prison for willfully failing to report their foreign bank accounts in Switzerland and Israel.
Dan Farhad Kalili, 55, Irvine was sentenced to a year and a day. His brother David Ramin Kalili, 52, and his brother-in-law David Shahrokh Azarian, 67, both of Newport Coast, each received eight months in prison.
According to documents and information provided to the court, Dan Kalili, David Kalili and Azarian willfully failed to file with the Department of Treasury FBARs regarding secret bank accounts in Switzerland and Israel that they maintained and controlled, many for well over a decade. These secret accounts held assets that reached into the millions of dollars.
All three also took steps to hide their assets, transferring money between various accounts and making only partial disclosure of some of the accounts on returns.
In addition to the term of prison imposed, Dan Kalili was ordered to serve one year of supervised release and to pay $337,443 in restitution. He also agreed to pay a civil penalty of $2,674,329.
David Kalili was ordered to serve one year of supervised release and to pay $243,019 in restitution. He agreed to pay a penalty of $1,325.121. Azarian was ordered to serve one year of supervised release and to pay $197,840 in restitution. He too agreed to pay a penalty of $951,607.
Placerville, Calif.: Preparer Teresa Marty, 57, owner of Advanced Financial Services, has been sentenced to 10 years in prison for conspiring to file more than 250 false refund claims.
According to documents filed with the court, Marty, of Pollock Pines, Calif., conspired with her office manager, Pamela Harris, and Rebecca Bandera-Marty to file fraudulent federal tax returns claiming more than $60 million in refunds.
Marty and Harris recruited clients by falsely representing that the clients could legally receive large refunds by filing returns using 1099-OIDs. AFS prepared false 1099-OID that reported the clients’ debts as income and the same amount as income tax withheld, resulting in significant claims for undeserved refunds.
The scheme included clients from 26 states and caused the IRS to pay out over 40 tax refunds, totaling more than $9 million.
Marty, Harris and Bandera-Marty were indicted in June 2013 along with two clients, Charles and Victoria Tingler. Afterwards, Marty and the Tinglers, with the help of Harris, filed fraudulent multi-million-dollar liens against government officials, including three IRS employees involved in collecting taxes the Tinglers owed. Marty filed $84 million liens against the then-acting U.S. Attorney for the Eastern District of California and a former DOJ Tax Division attorney involved in filing suit to permanently enjoin Marty and AFS from preparing returns.
The liens filed with the California Secretary of State unlawfully disclosed personal ID information of the government employees. Harris and Marty also hired a collection agency to enforce a $500,000 false lien that Charles Tingler filed against an IRS revenue officer.
Marty was also ordered to serve two years of supervised release and to pay $9,500,492.83 restitution to the IRS.