Tax Fraud Blotter: Healing and stealing
Psychics gone bad; wrong numbers; cattle and veils; and other highlights of recent tax cases.
Boston: Purported psychic Sally Ann Johnson, 41, of south Florida, has been sentenced to 26 months in prison and been ordered to repay $3,567,300 to the victim and to pay $725,912 in restitution to the IRS for hiding more than $3.5 million of income that she was paid by an elderly woman.
Johnson, a.k.a. Angela Johnson, Angelia Johnson and Sally Reed, pleaded guilty in October to attempting to interfere with the administration of the Internal Revenue laws.
Johnson owned and operated various businesses, including Flatiron Psychic, Psychic Match and Psychic Spiritual Salon, all of which purported to offer “psychic readings,” “spiritual cleansing & strengthening,” and “meditation & healing.” From 2007 to 2014, she was paid over $3.5 million by an elderly woman living on Martha’s Vineyard to purportedly perform spiritual cleansing and healing services to rid the woman of demons through repeated exorcisms.
Rather than reporting her income to the IRS and paying taxes on it, Johnson took steps to conceal it. She used an alias and directed the woman to send payments to at least three different bank accounts with which Johnson was associated, including an account in another person’s name. Johnson then withdrew large portions of the woman’s payments from the accounts in cash.
In addition, Johnson accrued substantial charges on a credit card held in the name of the elderly woman, who ultimately paid the credit card bills, thereby concealing from the IRS the true extent of Johnson’s income. Neither Johnson nor any of the businesses she operated filed a return or paid taxes on the income.
Scott, La.: Preparer Vida Prejean Thomas, 44, has received 18 months in prison for falsifying returns and causing the IRS to pay out more than $105,000.
According to the Oct. 10 guilty plea, the IRS began investigating Thomas’s prep business after receiving a tip alleging fraudulent activity. Investigators interviewed nine of her clients and found that their personal income tax returns from 2010 through 2013 contained false information put there without their knowledge or authorization. The false returns Thomas prepared caused a loss of $105,813 to the IRS.
She was also sentenced to a year of supervised release and ordered to pay $105,813 in restitution.
Anchorage, Alaska: Demetrick Ruffin, 43, from Los Angeles, has been sentenced to 95 months in prison to be followed by three years of supervised release for his scheme to use stolen personal ID information to prepare false W2s and then file false individual income tax returns to get refunds due to others.
Ruffin pleaded guilty in April to one count of conspiracy to commit wire fraud and one count of aggravated ID theft.
According to court documents, he conspired with others to obtain such ID information as names, dates of birth and Social Security numbers that were then used to prepare false W2s that contained fabricated wage and withholding amounts.
The co-conspirators then took the information and falsified documents to prep services in Anchorage, Eagle River and Palmer, Alaska, as well as in Los Angeles and Orange County, Calif., to have federal returns prepared and efiled.
In some instances, Ruffin and co-conspirators used the stolen information to claim that the “taxpayers” had dependent children that they did not in fact have. In many cases, the defendants applied for RALs and had the phony refunds loaded onto stored value cards allowing them instant access to the money.
Co-conspirators sentenced so far in this case are also all from Los Angeles: Jameane Bolton-Williams, sentenced to 82 months in prison and ordered to pay $91,927.65 in restitution; Joe Douglas, sentenced to 57 months in prison and ordered to pay $43,043.55 in restitution; and Lucille Stansberry, sentenced to three years and a day in prison and ordered to pay $48,619.95 in restitution.
The sentencing judge noted that Ruffin had committed part of his crimes while incarcerated in Los Angeles, “undeterred even by jail bars.” As a condition of his supervised release, Ruffin is prohibited from accessing, by any means, the Internet.
Allentown, Pa.: Attorney Douglas M. Marinos, 56, has pleaded guilty to one count of willfully failing to collect, truthfully account for and pay over federal taxes owed by his law firm.
Marinos pleaded guilty to failing to pay over to the IRS withholdings from the paychecks of his firm’s employees.
He faces up to five years in prison, three years of supervised release, a $10,000 fine and a $100 assessment. As part of his plea agreement, Marinos is also required to pay some $285,000 in restitution to the IRS.
Highland Park, Ill.: Jordan Eckerling, 52, operator of a cell phone distributorship in Illinois and other Midwestern states, has pleaded guilty to willfully failing to pay more than $800,000 in personal and corporate income taxes.
Eckerling, owner of Pagecomm of Illinois Inc., admitted that from 2008 to 2012 he caused tax losses to the U.S. and Illinois totaling $806,099. As the sole shareholder and officer of Pagecomm, Eckerling attempted to conceal income by causing the company to issue him “business checks” that he cashed and used for personal expenses. He also caused the company to directly pay a housekeeper to regularly clean his boat and his primary and secondary residences, and he charged personal expenses to Pagecomm’s credit card accounts, including for a family vacation to Mexico.
Eckerling also admitted that he added a relative to the payroll of Pagecomm and its successor company, PCW Holdings, even though the relative was employed elsewhere and did no work for either company. Eckerling did this to obtain health insurance for his family under the relative’s name instead of his own, thereby concealing that he was an income-earning employee of the companies.
He faces up to five years in prison and a fine of up to $100,000. Sentencing is May 17.
Hillsville, Va.: Business owners Jeffrey and Karen Dalton have been convicted of tax evasion and conspiring to structure currency transactions.
According to evidence at trial, the Daltons owned Blue Ridge Stainless, a subcontracting business that provided labor to renovate large retail department and grocery stores, operating the company out of their home. The Daltons filed their 2009 through 2014 personal federal returns reporting the income earned from BRS but failed to pay the taxes, penalties and interest owed.
Despite repeated IRS contact over years about their delinquent taxes and pending liens, the Daltons refused to pay their outstanding tax liabilities, used nominees to conceal their ownership of property and filed false documents with the IRS. After the IRS levied the Daltons’ personal bank accounts, they used funds from the BRS business bank account to start a cattle business and pay for their children’s weddings.
Evidence also proved that during six months in 2015 the Daltons repeatedly withdrew cash from BRS’s business bank account in amounts less than $10,000 to evade federal bank-reporting requirements, structuring more than $250,000 in withdrawals.
Sentencing is April 24. Jeffrey and Karen Dalton face a maximum of five years in prison on the tax evasion and conspiracy charges, as well as periods of supervised release, restitution and monetary penalties.