Tax Fraud Blotter: ‘Daddy needs your ID’
Scamming from a cell; Speedy decision; a gamble pays off with four years; and other highlights of recent tax cases.
Des Moines, Iowa: Preparer Lony Tap Gatwas, 48, of Ames, Iowa, has been convicted of preparing and presenting false returns, wire fraud and aggravated ID theft.
Gatwas was charged with engaging in a scheme to defraud the IRS by preparing and filing personal income tax returns listing false dependents. Evidence showed that Gatwas placed his own children, as well as other children, on his clients’ personal returns as dependents to inflate clients’ refunds by thousands of dollars.
Clients’ testimony established that Gatwas charged them an average of $1,500 for each false dependent he put on their return. When his clients were audited, Gatwas instructed at least two of the clients to lie to IRS agents about their relationship with the false dependents.
Sentencing is Dec. 1. Preparing and presenting a false return carries a maximum sentence of three years in prison and a maximum $100,000 fine, while wire fraud carries a maximum of 20 years and up to a $250,000 fine. Gatwas faces a minimum of two years and up to a $250,000 fine for aggravated ID theft.
Freeport and Roosevelt, N.Y.: A federal court has permanently enjoined Elias Linares, Margea Zaldivar and their businesses Taxes La Universal Corp., Universal Taxes & Staffing Corp. and Taxes La Universal II Corp., from preparing federal tax returns for others.
Linares and Zaldivar agreed to a civil injunction order entered against them, which requires them and their businesses to cease tax return preparation and to notify current and former clients of the injunction.
According to the government’s complaint, Linares and Zaldivar routinely prepared federal returns for clients that contained false or erroneous claims for education tax credits, fuel tax credits and the EITC. For example, the complaint alleges that Linares and Zaldivar falsely claimed education tax credits, including listing the Department of Education as an educational institution at which their clients incurred expenses.
IRS investigators sent questionnaires to clients whose returns contained suspicious items, according to the complaint, and one of these clients dropped off the questionnaire at Taxes La Universal and picked it up when it was completed. This questionnaire stated that the client attended a local community college, which the client later admitted was untrue, according to the complaint.
The complaint alleges that Linares and Zaldivar understated clients’ tax liabilities to claim undeserved refunds, and said that all 51 returns examined by the IRS and prepared by Linares, Zaldivar or their businesses contained false or erroneous claims, resulting in a collective tax deficiency of over $479,000.
Lafayette, La.: Tax prep business owner Kevin Dalcourt, 49, has been sentenced to three years in prison and a year of supervised release, and been ordered to pay $397,989.78 in restitution and an $89,927 fine for filing a false return and not paying more than $350,000 in taxes owed.
According to the guilty plea, Dalcourt was a preparer who owned and managed Kevin’s Tax Service. He was incarcerated in 2010 on non-tax related state charges but continued to manage his prep business. He trained his staff and managed his business prior to his incarceration to use false information on client returns to inflate refunds.
His wife, Tamiko Dalcourt, assisted in running the company from 2010 to 2013, while her husband was in prison. She pleaded guilty to a misdemeanor of failing to file the couple’s 2012 joint tax return.
Kevin’s Tax Service was highly profitable, but Dalcourt did not report his income to avoid paying taxes for tax years 2009 to 2011, an estimated $356,426.78 in taxes.
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.
Lauderhill, Fla.: Preparer Frantz Petit-Dos, 41, has pleaded guilty to conspiring to file and filing fraudulent returns with the IRS.
According to case documents, Petit-Dos owned two prep businesses: Imperial Taxation and Multi-Services Corp. and Aleluya Universal Accounting Services Inc., with Luczor Fertilien, 39, and David Joseph, 37. From approximately 2010 through last year, Petit-Dos, Fertilien and Joseph filed fraudulent returns for their clients seeking undeserved refunds by reporting fictitious business income, fraudulent education and fuel tax credits, and claiming deceased individuals as dependents. They also filed returns in the names of individuals whose identities had been stolen.
Petit-Dos did not report the proceeds from this scheme on his personal returns and admitted to causing a tax loss of more than $550,000. On July 14, Fertilien and Joseph pleaded guilty to their involvement and will be sentenced on Sept. 22.
Petit-Dos will be sentenced on Oct. 6, when he faces a maximum of five years in prison on the conspiracy count and a maximum of three years in prison on the false return count. He also faces a period of supervised release, restitution and monetary penalties.
Temple Hills, Md.: Local resident Anthony Ferguson has pleaded guilty to conspiring to file fraudulent claims for tax refunds, wire fraud, aggravated ID theft and false personation.
According to case information, Ferguson participated in a stolen-ID refund fraud from January 2012 through May 2016. He and co-conspirators obtained personal ID information from several sources and used those identities to file returns and obtain fraudulent refunds from the IRS.
In 2016, Ferguson pretended to be an employee of the U.S. Department of the Treasury and sent text messages to a witness to obtain details of an ongoing investigation into his conduct.
Sentencing is Oct. 23. He faces a maximum of 10 years in prison for conspiring to file false refund claims, 20 years for each count of wire fraud, three years for false personation and a mandatory minimum of two years in prison for each count of aggravated ID theft. Ferguson also faces a period of supervised release, restitution and monetary penalties.
Washington: Preparer Joanne Little, 60, of Suitland, Md., has been sentenced to 15 months in prison for preparing fraudulent returns.
According to documents filed with the court, Little worked as a preparer at Speedy Tax Service, a prep business that previously operated under the name Instant Tax Service. She prepared federal income tax returns for tax years 2009 through 2014 that sought refunds to which her clients were not entitled by including inflated charitable deductions, fictitious unreimbursed employee expenses and false business losses.
Little, who previously pleaded guilty, admitted to causing a tax loss of $262,714. She was also ordered to serve a year of supervised release and to pay $262,714 in restitution to the IRS.
Gulfport, Miss.: Preparer Doris Kelley, 65, has been sentenced to 48 months in prison for obstructing the internal revenue laws and aiding in the preparation of a false return.
According to information presented to the court, Kelley operated a prep business from her home and instructed several of her clients who owed income taxes to the IRS to write payment checks directly to her, rather than to the IRS.
Kelley, who pleaded guilty in April, kept these funds for herself and used most of the money to gamble at local casinos. Typically, Kelley provided copies of accurate returns to her clients but did not file any return with the IRS. In some cases, she also filed false returns in her clients’ names without their knowledge.
Kelley earned hundreds of thousands of dollars from her scheme and caused a tax loss of more than $500,000. She was also ordered to serve a year of supervised release and to pay $519,635.72 restitution, including $357,534.49 to the IRS and $162,101.23 to individual victims.