His Dishonor; World of hurt; Structural defects; and other highlights of recent tax cases.
Wildwood, New Jersey: Mayor Peter J. Byron, 67, has pleaded guilty to aiding and assisting in the preparation and presentation of false and fraudulent returns for 2017 and 2018.
During those years, Byron served as a commissioner for Wildwood. From June through August of 2017, he sent multiple emails to the managing partner of a nearby law firm, seeking assistance in obtaining a job. Byron received a letter that October on the letterhead of the managing partner's law firm that purported to be an employment offer; Byron was to receive an annual salary from the company for working as a salesman.
From October 2017 through September 2018, he received $40,425 in payments from the company. He did not report this income on his tax returns for 2017 and 2018, resulting in a tax loss to the IRS.
The charges each carry a maximum of three years in prison and a maximum fine of $250,000, or twice the gross amount of gain from the offense, whichever is greater. Sentencing is Aug. 2.
Laurel, Mississippi: Former tax preparer Kakeia Latiece Williams has pleaded guilty to knowingly making a false statement on an income tax return.
Williams owned and operated the local tax prep business Massive Tax or Massive Tax Corporation. The business also had other names, including KBG Enterprises or KBG Enterprises LLC. Between at least 2014 and 2015, KBG Enterprises, d.b.a. Massive Tax, prepared and filed client returns. Williams personally prepared client returns as well as her own returns.
IRS investigation revealed that she knowingly and intentionally made false material statements in her own returns for 2014 and 2015, failing to report substantial income that she had earned as a tax preparer.
Sentencing is June 14, when she will face a maximum of three years in prison and a $250,000 fine. Williams also could be ordered to pay restitution to the federal government for unpaid taxes; she has agreed to pay $98,000 in restitution to the IRS.
Waco, Texas: A group of tax preparers has been sentenced for conspiring to file false returns.
Between 2012 and 2017, Labanda Loyd, Deidra Brandon, Shaterian Parr, Jaleesia Sais and Lashamekwa Alexander worked as preparers at Tax World and another local prep firm. Loyd also served as manager and Brandon was, at times, Loyd's assistant manager. They conspired to prepare and file tax returns that fraudulently claimed undeserved refunds for clients; Loyd instructed some of her co-conspirators how to prepare the false returns.
For some clients, the conspirators completely fabricated employment, wage and tax withholding information. For others, they altered the wages and withholdings legitimately reported to the IRS by their employers.
In all, the conspirators
Loyd was sentenced to 51 months in prison, Sais to 40 months in prison and Brandon to a year and a day. Parr was sentenced to five years of probation and Alexander to 40 months of probation. Loyd, Sais, Brandon, Alexander and Parr were also each ordered to pay $918,396 in restitution to the United States.
Philadelphia: Yolonda Thompson, a.k.a. Qhama Al, has been sentenced to 100 months in prison for conspiring to defraud the IRS and assisting others in filing false income tax returns.
Between 2009 and 2015, Thompson and conspirator Albert Upshur, a.k.a. Kelinde Jaha, attempted to obtain millions of dollars in a fraudulent debt relief scheme they referred to as the Debt Payoff Process. Thompson and Upshur formed the Yolonda Denise Thompson Living Trust; participants in Debt Payoff were told that if they paid money to Upshur and filed returns and other documents that Thompson prepared for them, they could access funds from the Thompson Trust to pay off their mortgages and other debts. The returns that Thompson prepared and participants filed with the IRS claimed undeserved refunds.
The scheme sought more than $325 million in fraudulent refunds. The IRS paid out $1,511,236.
After the IRS began to investigate, Thompson and Upshur attempted to obtain money from the IRS by other fraudulent means, including using checks drawn on closed bank accounts and trying to use such financial instruments as fictitious bonds. They also continued to file false returns for themselves and others after the IRS assessed civil penalties against them and notified them that they were under investigation.
Thompson was also ordered to serve three years of supervised release. Upshur was
West Palm Beach, Florida: A federal court has held that tax preparer Jeffrey Cadet violated a permanent injunction from 2019 that barred him from acting as a federal tax return preparer or requesting, assisting in or directing the preparation or filing of federal tax returns for others.
In January 2022, following an investigation of Cadet's activities, the United States asked the court to hold him in civil contempt based on evidence that he was preparing returns without signing them as the preparer. Cadet did not respond to the motion or contest the evidence against him. Based on the evidence presented by the United States, the court found that Cadet violated his injunction by continuing to prepare returns for customers and held him in civil contempt.
To remedy his contempt, the court ordered Cadet to disgorge $24,410 in fees he received for conduct that violated the injunction. The court also ordered him to pay the U.S. $7,386.39 to reimburse the government for attorneys' fees.
The injunction barring Cadet from preparing returns remains in effect, and the United States remains authorized to monitor his compliance.
Tulsa, Oklahoma: Executive Phillip Barry Albert has pleaded guilty to evading more than $1 million in income taxes.
From 2014 to 2019, Albert was president of Pelco Structural and directed its outside payroll service company to pay him more than $2.6 million, further instructing that the payments be classified as reimbursements rather than income so federal income taxes would not be withheld and the payments would not be reported on his W-2s as wages.
Albert filed individual income tax returns for 2014 through 2019 that did not report the payments, totaling $2,615,750, causing a tax loss to the IRS of $1,000,232.
He faces a maximum of five years in prison as well as a period of supervised release, restitution and monetary penalties.
Chicago: A federal jury has found former attorney and real estate developer Robert Kowalski guilty on two counts of embezzlement, six counts of bankruptcy fraud and eight counts of tax fraud.
Kowalski was a close associate of John Gembara, the former president of Washington Federal Bank for Savings, a small bank in a Chicago neighborhood. The bank was closed in 2017 for being insolvent.
Kowalski served a key role in an embezzlement, diverting more than $8 million, plus property that was rightly the collateral of the bank for other loans. The embezzled funds that Kowalski received from Washington Federal were concealed by entering them on the bank's records as loan disbursements.
After the collapse of the bank, the FDIC attempted to collect on the money and properties that Kowalski obtained as part of the embezzlement. To avoid losing the assets, he filed a fraudulent bankruptcy case in which he attempted to conceal numerous assets.
To substantiate the financial claims made within his bankruptcy filings, and avoid paying taxes, Kowalski filed false corporate returns in 2014 and 2015 and false personal returns in 2015, 2016 and 2017. He failed to file returns in 2013 and 2014.
Sentencing is June 2. Kowalski could face up to 82 years in prison.
