Tax Fraud Blotter: Mother of a scam
Deep trouble for Deepwater scam; $6K in false HSH income; and other highlights of recent tax cases.
St. Petersburg, Fla.: Preparer Joseph Bassler, 61, has pleaded guilty to mail fraud and money laundering.
According to the plea agreement, Bassler held himself out as a professional accountant who could assist companies affected by the Deepwater Horizon oil spill in filing business economic loss claims.
As part of his scheme, he prepared and submitted fraudulently inflated claims falsely alleging lost income on behalf of his clients. He also created false documents, including false monthly profit and loss statements that he provided in support of the fraudulent lost income claims. As payment, he accepted a portion of the recovery money for the loss claims that he had prepared.
Bassler submitted 62 claims, three of which were paid. For the three claims that were paid, Bassler and his clients received over $600,000 more than they were entitled from the compensation fund. The remaining claims were denied when Bassler’s fraudulent scheme was discovered.
He faces a maximum of 20 years in federal prison on the mail fraud count and up to 10 years in federal prison for the money laundering offense.
Nashville, Tenn.: Preparer Tracey Brown has been sentenced to a year and a day in prison for aiding and assisting in the preparation of fraudulent returns.
According to documents filed with the court, Brown operated Total Tax Services from her residence. From approximately January 2006 through December 2010, she routinely filed fraudulent returns without her clients’ knowledge or permission in an attempt to increase their refunds.
On these returns, Brown claimed false medical expenses, charitable contributions and business losses as well as other phony deductions. The tax loss was approximately $443,605.
Brown, who pleaded guilty in September to one count of aiding and assisting in the preparation of a false tax return, was also ordered to serve a year of supervised release and to pay $210,169 restitution to the IRS.
San Francisco: Local residents Howard Hsu and his mother, Tracy Chang, have been sentenced to prison following their convictions on tax fraud charges.
Hsu and Chang were found guilty of conspiring to file fraudulent corporate income tax returns, filing false tax returns and aiding the preparation of false returns. According to the evidence at trial, Hsu, 36, owned and operated Didsee Corp., a business incorporated in Nevada that provided advertisement-marketing services to online Web sites and marketplaces.
Chang, 65, was Didsee’s bookkeeper and listed as the president, secretary, treasurer and director. Chang opened bank accounts for the business, transferred money between accounts and paid Didsee’s bills.
Hsu and Chang conspired to file fraudulent 2008 and 2009 corporate returns and an amended 2007 corporate return, cheating the IRS out of approximately $500,000. Hsu also provided false summaries to Didsee’s preparers, which claimed business expenses that were not incurred and included Hsu’s personal expenses. Chang signed the fraudulent returns as Didsee’s president.
Hsu was ordered to serve 33 months in prison; Chang was ordered to serve 12 months and one day in prison. The two were also ordered to serve three years of supervised release, pay $396,306 restitution to the IRS and pay fines of $75,000 for Hsu and $7,500 for Chang.
Lakewood, Colo.: Preparer Hieu Mattison, 53, has been sentenced to 21 months in prison for preparing and filing false federal income tax returns.
According to case records, between 2008 and 2012, Mattison, the owner and primary preparer of AAAE Financial Inc., prepared federal income tax returns in which he added such false income items as W-2 wages, household help income and false Schedule C income to his mostly low-income clients’ tax returns.
The false items increased various tax credits and resulted in false refunds. On occasion, Mattison added false education credits instead of false income. Though he had four employees at AAAE, Mattison reviewed all tax returns before they were transmitted to the IRS.
Most of the generated refunds were direct deposited into a business bank account controlled by Mattison. After the refund was deposited into the account, the client would usually pick up the refund in cash, less Mattison’s preparation fee.
When an undercover agent posed as a client at AAAE, Mattison added $6,002 in false household help income, as well as educational expenses that Mattison and the agent had not discussed.
Mattison filed 34 false returns for 16 individuals for the tax years 2008 through 2012, for a total tax loss of $133,544.
He was also ordered to serve a year on supervised release and pay $133,544 restitution to the IRS, and he cannot be involved in the tax prep business.