A roundup of our favorite recent tax fraud cases.
Liberty Township, Ohio: Kyle Wade, 44, has pleaded guilty to one count of obstructing and impeding the administration of the Internal Revenue Code.
According to court documents, Wade is the former vice president of franchising for Instant Tax Service and once owned multiple ITS franchises. From Jan. 1, 2004 through Nov. 1, 2012, Wade and another individual executed a scheme to obstruct the IRS wherein numerous ITS franchises filed false federal income tax returns without the permission of their taxpayer clients and without receiving a valid W-2 form from each client. The returns included false and inflated sole proprietorship Schedule C income in an attempt to increase the EITC.
Wade and another individual also created and presented false documents with the IRS, such as phony W-2 forms that were created by ITS employees using tax preparation software and various other false IRS forms containing forged signatures.
Wade faces a maximum of three years in prison and a fine of $250,000.
Springfield, Pa.: Mohamed Mansaray, 39, has been charged with 10 counts of wire fraud, nine counts of aggravated ID theft and 10 counts of aiding or assisting in preparation or filing of false income tax returns.
According to the indictment, Mansaray prepared and filed fictitious returns that used the names and Social Security numbers of children as false dependents. He allegedly charged clients $800 to $1,000 to falsely include a dependent on their return.
On July 2, 2014, Mansaray pleaded guilty to charges of conspiracy and 13 counts of aiding or assisting in preparation or filing of false income tax returns in a similar scheme, admitting that he falsified income tax returns for clients by fraudulently adding dependents to returns for the tax years 2008 through 2012. He awaits sentencing for those charges.
If convicted, he faces between 51 and 57 months in prison for the new charges, possible fines, up to three years of supervised release and a $3,000 special assessment.
Miami: Two residents have pleaded guilty for their role in a stolen ID refund fraud.
Jim Joseph and Roland Alexis pleaded guilty to one count of a multi-object conspiracy to defraud the IRS, commit wire fraud and commit aggravated ID theft, and one count of aggravated identity theft.
According to court documents, between 2007 and July 2014, Joseph and Alexis obtained the personal ID information of individuals, some deceased, including names, Social Security numbers, addresses and dates of birth, without the individuals’ authorization. The information belonged to prisoners and deceased individuals.
In late 2009, Alexis formed Worldwide Income Tax Multi-Services LLC and North Miami Income Tax Services with the intended purpose of filing fraudulent tax returns using stolen identities. Joseph, Alexis and others then used the stolen identities to e-file more than 860 fraudulent returns for a total tax loss of $3 million.
Both face a maximum of five years in prison and three years of supervised release for the conspiracy charge and a statutory mandatory sentence of two years in prison and one year of supervised release for the aggravated ID theft charge. Both charges carry a statutory maximum fine of $250,000.
College Park, Md.: A federal jury has convicted Charles W. Parker Jr., 49, of one count of conspiring to defraud the U.S. and six counts of filing false income tax returns.
According to evidence, from March to June 2009, Parker recruited clients for co-conspirator Penny Jones, a preparer in Idaho, who prepared tax returns falsely reporting the amount of taxes withheld and purportedly paid to the IRS. Jones was sentenced in 2013 to some 10 years in prison.
Parker collected financial information from clients and provided it to Jones. In May 2009, after Parker paid Jones to prepare a false return for two co-conspirators from Atlanta, for the IRS to issue a tax refund to the co-conspirators of $1,723,693. Returns filed by Parker and his co-conspirators requested fraudulent refunds totaling more than $7.4 million; the IRS issued fraudulent tax refunds to Parker and his co-conspirators totaling $2,007,568.
Parker faces a maximum of 10 years in prison for the conspiracy and a maximum of five years in prison for each of the six counts of filing a false return. Sentencing is March 28.
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