Tax Fraud Blotter: ‘Hey fella’
Numbers game; we have a loser; scrapped; and other highlights of recent tax cases.
Philadelphia: Preparer Abdoulaye Coumbassa has been sentenced to two years in prison for aiding in the preparation of a false client tax return.
Coumbassa, who pleaded guilty last year, owned and operated Abbi Tax Services and Accounting. From at least 2012 to 2015, he prepared and filed fraudulent returns on behalf of clients to inflate refunds. Coumbassa caused a tax loss of $2.1 million to the IRS.
He was also ordered to serve a year of supervised release and pay some $250,000 in restitution to the U.S.
Richmond, Virginia: Banita Brandise Saffore, 34, has been sentenced to some seven years in prison and been ordered to pay $169,227 in restitution to her victims for conspiracy to commit wire fraud, aggravated ID theft and failure to appear in court for a sentencing hearing.
Saffore and her mother, co-defendant Charlene Saffore Cannon, ran a tax prep service in which they systematically filed returns for clients that contained false representations for Schedule C income, dependents and education expenses to inflate refunds. As early as 2011, they also began filing fraudulent returns using stolen IDs and pocketing the refunds.
Saffore pleaded guilty to the conspiracy and ID theft charges but then failed to appear at her sentencing in September 2018.
Maplewood, New Jersey: Preparer Zenobia Williams, 52, has pleaded guilty to her role in conspiring to defraud the IRS and filing false personal returns for a New Jersey business owner and two other individuals.
Williams pleaded guilty to one count of conspiring to defraud the IRS by reporting false business expenses on the business owner’s return to fraudulently reduce his tax liability and by reporting those sham expenses as income on two other individuals’ returns to obtain unwarranted refunds.
In 2016, Williams operated Maplewood Business Services, a tax prep business. Williams and the business owner agreed to report false labor expenses for his business on his personal return for calendar 2015 to decrease his tax liability. In January of that year, Williams sent the business owner a text message, stating, “Hey Fella, I have 1 client right now that needs 15,750 in income. I need you to produce a 1099MISC form for that person. I will give you the information. Let me know how much more income you need to 1099.”
Subsequently, at the business owner’s direction, Williams prepared two 1099s that falsely stated that in 2015 his business paid one individual $15,800 and another individual $11,255, when both Williams and the business owner knew that no such compensation had been paid to those individuals. Williams also prepared a personal return for the business owner that falsely reported the phony business expenses totaling $27,055 and reported the bogus expenses as income on the returns of the two individuals.
The tax fraud conspiracy charge carries a maximum of five years in prison and a $250,000 fine. Sentencing is April 17.
Denver: Remijio Rafael Hau Chi, 45, formerly of Littleton, Colorado, has been sentenced to 18 months in prison for fleeing the U.S. to avoid a sentence imposed in a previous tax fraud case.
Hau Chi, along with his spouse Wilma Hau, were sentenced in February 2014 for conspiracy to make false and fraudulent claims to the government. Hau Chi participated in a scheme in which stolen taxpayer ID information was used to submit fraudulent returns to the IRS claiming refunds. Investigation concluded that 138 false federal income tax returns resulted in the issuance of $430,753 in fraudulent refunds. Chi used a significant portion of the refunds for his personal benefit, including the purchase of a residence.
After he was sentenced to 22 months in prison in that case, the court allowed him to report to serve his imprisonment once his wife completed her sentence. Hau Chi left his Littleton residence in March 2014 and became a fugitive, believed to be in Mexico. He was arrested in July 2018 while traveling.
Upper Darby, Pennsylvania: Omar Faruq, 37, and Omar Ali, 36, both of Pennsauken, New Jersey, and owners of a tax prep service, have been sentenced for their roles in conspiring to file false returns.
Omar Faruq was sentenced to 24 months in prison, three years of supervised release and restitution of $688,362; Omar Ali was sentenced to 18 months in prison, three years of supervised release and restitution of $573,322.
They pleaded guilty in June to filing false returns on behalf of clients at Omar Consultancy. The two used false filing statuses, Schedule A deductions and expenses, Schedule C business income and losses and fictitious credits to decrease clients’ tax liabilities and inflate refunds. They then diverted portions of these refunds into their own bank accounts as part of the conspiracy.
Bethany, Connecticut: Attorney William S. Palmieri, 56, has pleaded guilty to two counts of willful failure to pay income taxes.
Between 2006 and 2014, Palmieri, whose practice specializes in civil rights law, reported to the IRS but did not pay all the income taxes he owed. As of December 2017, Palmieri owed $227,709 in taxes, interest and penalties.
Sentencing is March 12, when Palmieri faces a maximum of two years in prison, a fine and restitution to the IRS.
Rocky Mount, North Carolina: Preparer Moses Whitaker, 44, has been sentenced to three years in prison after pleading guilty to aiding and assisting in the preparation and filing of a false return.
Whitaker owned and operated a tax prep business for the tax years 2010 through 2014 under the names M&S Tax Service and MIX Tax Service. Unable to obtain PTINs and ITINs due to his criminal record, he obtained these numbers using the names and personal information of others. During these years, Whitaker e-filed some 2,023 federal returns.
Even after the IRS executed a search warrant at the business in 2015, Whitaker applied for and obtained these numbers in the name of a relative and continued to prepare and file false income tax returns for clients. For the 2015 to 2018 tax years, he e-filed another 1,361 returns with the IRS.
The returns contained false dependents and inflated tax withholdings, education credits and unreimbursed business expenses. The scheme resulted in about a $2.8 million loss to the IRS.
Whitaker was also sentenced to a year of supervised release and ordered to pay $167,285 in restitution to the IRS.
Naugatuck, Connecticut: Preparer Ana Nunez, a.k.a. Ana Pagoaga, 48, has pleaded guilty to filing false tax returns.
Nunez owned and operated the tax prep business Nunez MultiServices, and from tax year 2011 and continuing at least through tax year 2014 she falsified information on federal returns she prepared for clients. She routinely inflated income or created fictitious income; falsified expenses, including education and child care expenses; and falsified deductions such as business mileage.
The charge carries a maximum of three years on each count.
Alexandria, Virginia: Tax lobbyist James F. Miller, 67, has been sentenced to a year in prison for willfully filing a false return.
Miller, a tax policy lobbyist and former employee of the Justice Department’s Tax Division, underreported his gross income on his 2010 through 2014 returns by more than $2.2 million. He filed multiple false federal returns that omitted partnership income he received from two law firms and the gross receipts he received from his own lobbying firm. The tax loss totaled more than $730,000.
Miller was also ordered to serve a year of supervised release and to pay $735,933 in restitution.