Tax Fraud Blotter: Headed upstate

Pelicon; far more than half; instant, speedy and guilty; and other highlights of recent tax cases.

Mesa, Arizona: Preparer David Steven Rubin, 51, has pleaded guilty to one count of aiding and assisting in the preparation and presentation of a false return.

Rubin operated J&R Accounting Enterprises and has some 25 years of experience preparing federal income tax returns. In June 2016, he prepared a return for a client that he knew included such false and inflated Schedule A deductions as false business expenses, general sales tax expenses and charitable contributions.

Sentencing is March 2.

Orleans Parish, Louisiana: Preparer Carlanda Allegra Isaac has pleaded guilty to conspiring to defraud the U.S. with regard to tax returns.

Isaac worked for Pelican Income Tax and Bookkeeping Services and then at the tax prep business Taxes by J.A.D.A., in New Orleans. Isaac and others conspired to falsify client returns to include false income, withholding and education credits to fraudulently inflate refunds.

Isaac faces a maximum of five years in prison, three years of supervised release, restitution and other monetary penalties.

Beverly Hills, California: Businessman Teymour Khoubian has been sentenced to 21 months in prison for filing returns that failed to report his offshore accounts in Germany and Israel and the income earned on those accounts.

Between 2005 and 2012, Khoubian jointly owned multiple accounts at Bank Leumi in Israel with his mother that held $15 million to $20 million. Since at least 2005, he also owned a foreign account at Commerzbank AG in Germany.

Khoubian prepared false returns for 2005 through 2011 that did not fully disclose his foreign accounts, nor report all of the millions of interest income earned. The total tax loss associated with the Bank Leumi accounts is some $1.2 million.

During 2011 and 2012, Bank Leumi requested that Khoubian sign a W-9. In an August 2012 phone call with a banker at Leumi, Khoubian stated that the reason he did not want to sign a W-9 was “because you have to pay half of it.”

In 2012 and 2014, Khoubian made multiple false statements to IRS investigators, including falsely stating that the Bank Leumi accounts were not in his name; that he did not own a bank account in Germany from 2005 to 2010; that he closed his German bank account and moved all of that money to the U.S.; and that none of the money in his German bank account was moved to Israel.

Khoubian was also ordered to pay $612,310 in restitution to the IRS. He also paid an FBAR penalty of $7,686,004 plus interest and penalties.

Kansas City, Missouri: Three preparers have pleaded guilty to aiding and assisting in the preparation of a false return: Ananeia Derseh, 42, his brother Azareia Derseh, 38 and Quashanda King, 38.

Azareia Derseh owned and operated a tax prep business under the names Instant Tax Service and Speedy Tax Service, at various locations. Ananiea was the manager of one of the offices and King the manager at another office.

Ananeia and Azareia Derseh and King each admitted they prepared federal income tax returns for clients containing materially false and fraudulent items. They prepared returns for at least 37 individuals resulting in at least 47 false income tax returns for tax years 2012, 2013 and 2014. They also included higher fee returns than what the clients were originally quoted. Often, a false Schedule C was included to inflate clients’ refunds.

Client refunds were used to pay the fees — $669 to $1,437 — with the fees often deducted from clients’ refunds before the refund was issued to the client. Their typical client usually had less than $3,000 in wages. They were assigned a preparer who input their W-2 wages, dependents and other information into the appropriate field of their e-filed returns. There was no meaningful review of the completed return; sometimes the client did not get a copy of the return.

Each defendant faces up to three years in prison and must pay restitution to the IRS.

Waltham, Massachusetts: John H. Nardozzi, 67, the CPA for the late State Senator Brian Joyce, has been convicted for conspiring with the senator to defraud the IRS from 2011 through 2014.

Nardozzi was convicted of defrauding the IRS of some $600,000 by manipulating income that should have been reported on Joyce’s corporate return and by applying it to Joyce’s personal return. He was also convicted of falsely creating an SEP fund for Joyce and his wife to which they were not entitled. In doing so, Nardozzi enabled Joyce and his wife to defer taxes on some $400,000 of income.

Nardozzi also assisted Joyce in an illegal rollover of Joyce’s SEP account to purchase stock in a private company and attributed income from Joyce’s law firm to Joyce’s wife even though she never worked for the law firm.

Sentencing is Jan. 9. Conspiracy to defraud the U.S. carries a sentence of up to five years in prison, three years of supervised release and a fine of $250,000. Aiding and assisting in filing a false return provides for a sentence of up to three years in prison, a year of supervised release and a fine of up to $100,000.

Syracuse, New York: Lathisa Smokes, 36, of Charlotte, North Carolina, has pleaded guilty to filing false returns and assisting others in preparing false returns, which caused the IRS to issue fraudulent refunds exceeding $100,000.

Smokes admitted that, from January 2013 to March 2014, she falsely represented herself as a licensed preparer and convinced taxpayers to supply her with their dates of birth, Social Security numbers, addresses and other information for themselves and their minor dependents. She then prepared and filed 21 returns that she knew contained false information. The returns caused the IRS to transfer $102,918 in fraudulent refunds to the taxpayers and Smokes. The IRS has recovered most of the money.

Sentencing is Feb. 13. Smokes faces a maximum of five years in prison, a fine of up to $250,000 and a term of supervised release of up to three years.

Auburn, New York: Timothy Blackman, 48, a self-employed contractor providing construction and remodeling services, has pleaded guilty to filing a false return.

From 2007 through 2010, Blackman failed to file federal income tax returns and failed to pay income taxes. After learning of an IRS investigation in June 2010, Blackman filed his 2007 individual return late and falsified that return by understating his true business receipts and total income from his business. He had previously pleaded guilty to felony tax evasion in March 19, 2004, for which he received a sentence of 15 months in prison.

Sentencing is Feb. 17, 2020. The charge carries a maximum of three years in prison, a year of supervised release, and a fine of up to $250,000.

Rochester, New York: Jason Bassett, 43, has pleaded guilty to filing a false return.

Bassett owned and operated a paving and sealing company, and failed to deposit all of its income into the business bank account. He also did not advise his tax preparer that he had cashed numerous business checks. For tax years 2012 through 2015, Bassett failed to report some $1,704,873.89 in income on his returns, which resulted in his failing to pay some $378,331 in federal taxes. He also failed to withhold taxes from the wages of his employees, did not provide his employees W-2s and did not report this on any other return.

The charge carries a maximum of three years in prison and a $250,000 fine.

Waco, Texas: Preparer Janell Lightner has been sentenced to 27 months in prison for her role in a conspiracy to defraud the United States.

Lightner and co-defendant Stacey Anderson conspired to prepare false returns for clients of Anderson’s tax prep business. The two prepared returns for clients in Texas, Maryland and the District of Columbia.

From 2013 through 2014, Lightner assisted Anderson in preparing returns that inflated deductions and claimed false education credits to increase client refunds.

Lightner was also ordered to serve three years of supervised release and pay $1,337,800.88 in restitution to the U.S. Anderson was sentenced earlier this year.

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