A roundup of our favorite recent tax fraud cases.
Ames, Iowa: Preparer Lony Tap Gatwas, 47, has been charged with preparing and presenting false returns, wire fraud and aggravated ID theft.
According to the indictment, from February 2011 through at least March 2013, Gatwas operated a tax prep business in Des Moines, Iowa, and devised a scheme to claim dependents on clients’ returns when he knew the dependents did not meet IRS requirements. He also charged taxpayers an additional fee for each dependent he put on their return.
The trial is Jan. 30. Preparing and presenting a false return is punishable by a maximum three years of imprisonment and a maximum $100,000 fine; wire fraud carries a maximum of 20 years and up to a $250,000 fine. Gatwas also faces a minimum two years in prison and up to a $250,000 fine for aggravated ID theft.
El Dorado Hills, Calif.: Sherry Taggart, 57, has been sentenced to two years in prison and been ordered to pay $757,412 restitution for conspiring to file false claims and filing false claims.
According to court documents, Taggart, who pleaded guilty last fall, joined a scheme initiated in 2008 and operated by her co-conspirator, Barbara Antonucci, an unlicensed tax preparer, to obtain false refunds by preparing and filing false claims on behalf of clients with the IRS. The two prepared and filed hundreds of false claims with the IRS between June 2012 and March 2014, seeking refunds totaling some $1.4 million. The IRS issued more than $757,000 in illegitimate refunds.
The fraudulent returns reported false wages and dependents for clients and, in many cases, qualified the clients for the EITC when the client’s true wages or family situation would have qualified the client for no credit or a lower credit. Most of the fraudulent returns also listed wages associated with self-employment not documented by a W-2.
The defendants obtained the names, Social Security numbers and other personal ID information of minors and falsely listed those minors as dependents on returns for clients who were unrelated to those minors. They also filed false claims on their own behalf.
Taggart begins serving her sentence on Feb. 17. Antonucci was sentenced earlier this month to three and a half years in prison.
Irvington, N.J.: Preparer Darlene Covington, 32, has been sentenced to six months in prison and a year of supervised release for preparing fraudulent returns.
According to court documents and statements made in court, Covington was employed as a preparer at KCJ Financial Corp., where she obtained personal ID information such as names and Social Security numbers for 24 people. Covington then used this information without the knowledge of these individuals to prepare fraudulent returns.
Covington prepared these returns so that an uncharged co-conspirator would receive the refunds, then used the filed false income tax returns to secure RALs from various banks.
Covington, who pleaded guilty last summer, received $235 for each RAL. The fraudulent returns cost the government approximately $106,732.
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