Tax Fraud Blotter: Fast, fuel, FEMA and fraud

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Drug money; Phoenix descending; stepping down; and other highlights of recent tax cases.

Las Vegas, New Mexico: Preparer Carlos Perea, 44, has pleaded guilty to two counts of aiding and abetting the preparation of false income tax returns.

Perea owned and operated Perea Fast Tax, where he prepared income tax returns for clients and filed them with the IRS electronically and by mail. He admitted to reporting false information to decrease tax liabilities and increase refunds. Among the deceptive practices were deducting bogus business expenses, falsely reporting head of household status to increase the standard deduction and improperly claiming dependents to increase exemptions.

He faces up to three years in prison on each count.

Harrisburg, Pennsylvania: Two biofuel company owners have been sentenced to prison for conspiracy and making false statements to the U.S. Environmental Protection Agency and for conspiracy to defraud the IRS and preparing a false tax claim.

Ben Wootton, 55, of Savannah, Georgia, was sentenced to 70 months, and Race Miner, 51, of Marco Island, Florida, was sentenced to 66 months, following a jury conviction in 2019 of them and their Pennsylvania-based company Keystone Biofuels. The court ordered both men to pay $4,149,383.41 in restitution to the IRS and $5,076,376.07 in restitution to the Pennsylvania Department of Environmental Protection. They will also serve three years of supervised release after their imprisonment. Keystone was sentenced to five years of probation and ordered to pay more than $9.2 million restitution.

Wootton, Miner, and Keystone falsely represented that they were able to produce a fuel meeting the requirements for biodiesel, a renewable fuel, and adopted by the EPA, and as such were entitled to create renewable fuel credits.

McKees Rocks, Pennsylvania: Tax preparer David Francis has been sentenced to 10 years in prison for conspiracy to distribute heroin and aiding in the preparation of false income tax returns.

Francis also owned and operated Next Step Recovery Housing, a purported drug-rehabilitation center. While operating Next Step, he conspired to distribute more than 100 grams of heroin to his customers, many of whom were current or former clients of Next Step.

During the same time, Francis was the owner and operator of the prep business All Personal Matters, where he aided in the preparation and filing of fraudulent federal income tax returns for clients, resulting in a federal tax loss of $1,681,607.54. Francis partially funded the heroin trafficking through the money he unlawfully obtained through the scheme to defraud the IRS.

Norfolk, Virginia: Tax preparer Nikia Tull has been convicted on five counts of wire fraud and 33 counts of aiding and assisting in the preparation of false and fraudulent income tax returns.

Tull was co-owner and operator of YT Phoenix Enterprises, a.k.a. Phoenix Financial Tax Service, and between 2014 and 2018 aided and assisted in the preparation of 33 federal income tax returns containing numerous false and fraudulent items. In 2019, Tull also submitted forged and fraudulently altered bank statements to FORA Financial LLC, a private lending company located in New York, in support of loan applications for thousands of dollars.

Sentencing is April 12.

Duncansville, Pennsylvania: Resident Benjamin Allen Rhine has pleaded guilty to charges of conversion of government funds and filing false tax returns.

From about April 2013 to about June 2017, Rhine received $1,590,257 in undeserved grants from the Federal Emergency Management Agency. In 2015 through 2017, he also filed 1040s that reported no taxable income. Rhine in fact had a taxable income resulting in total tax due of $301,898.

Sentencing is Feb. 1. Rhine faces a maximum of 19 years in prison, a fine of $1 million or both.

Tucson, Arizona: Tax preparer Adan Ramirez, 37, has been sentenced to six months in prison and ordered to pay $100,479 in restitution to the IRS.

Ramirez, who previously pleaded guilty to aiding and assisting the preparation of false returns, presented fraudulent claims for wages, withholdings, dependents, Earned Income Tax Credits and Additional Child Tax Credits to obtain refunds.

Shreveport, Louisiana: Med lab exec Robert Clifton Poimboeuf, 58, has been sentenced to 40 months in prison for filing false returns.

Poimboeuf was part-owner of D&G Holdings, a medical laboratory. From 2011 through 2015, he filed returns that underreported gross receipts earned from his business. Poimboeuf concealed from his preparers at least two bank accounts reflecting income earned and falsely characterized business receipts as non-taxable loans. Poimboeuf caused a federal tax loss of more than $1.9 million.

He was also ordered to serve a year of supervised release and to pay $1,904,477 in restitution to the IRS.

Garden Grove, California: Preparer Michael Hung Lee, who cheated the IRS out of nearly $5 million by filing fraudulent income tax returns, has been sentenced to 34 months in prison.

From 2014 to March 2018, Lee owned and operated 1040 U.S. Tax Center, where he conspired with others to fraudulently prepare and file federal individual income tax returns for clients. Lee claimed Schedule D capital losses on returns that he knew his clients never approved. The federal government’s tax loss was at least $4,917,035.

Mylinh Thi Lee, Lee’s step-daughter and also a preparer at 1040 U.S. Tax Center, previously pleaded guilty to one count of aiding and assisting in the preparation of false returns. Her sentencing is Dec. 7.

Lee, who pleaded guilty last summer, was also ordered to pay $4,917,035 in restitution.

Great Falls, Montana: Businessman Trennis Baer has pleaded guilty to employment tax fraud.

From 2010 to 2018, Baer, who owned and operated Baer Construction, did not file quarterly employment tax returns nor did he pay over federal employment taxes withheld from employees’ wages. From at least 2013, the company’s outside accountant prepared the appropriate employment returns and calculated the employment taxes due.

Baer also did not file personal income tax returns for 2001 to 2006, 2008 and 2010 to 2018. The federal tax loss totaled more than $1.5 million.

Sentencing is Jan. 28, when Baer faces a maximum of five years in prison as well as a period of supervised release, restitution and monetary penalties.

Bentonville, Arkansas: Resident James Brassart has pleaded guilty to income tax evasion.

He filed a 2006 individual income tax return reporting adjusted gross income of $1,502,749 and tax due of $486,438. He did not pay all the tax due and was assessed penalties and interest.

To continue receiving income but to make it appear as if he did not have income or assets, Brassart used three nominee corporations to conduct business. Between approximately 2010 and 2016, he also filed four false bankruptcy petitions, each listing the IRS as a creditor. During the bankruptcies, Brassart made false statements and filed fraudulent documents in which he concealed his ownership interests in the nominee corporations.

He caused a federal tax loss of some $1,360,682.

Brassart faces a maximum of five years in prison as well as a period of supervised release, restitution and monetary penalties.

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