Tax Fraud Blotter: Nailed
Jail for former IRS rep; ‘made-up’ income; Elite but guilty; and other highlights of recent tax cases.
Kansas City, Kan.: Former IRS employee Carla Lachelle Mitchell, 49, has been sentenced to a year and a day in prison for filing false returns.
Mitchell worked as a lead contact representative at the IRS Service Center in Kansas City, Mo., from 2006 to 2015, and admitted that she prepared false federal income tax returns for 2011, 2012 and 2013 for 13 of her friends and family, as well as for herself.
Mitchell included several false entries such as fraudulent wages or dependents to lower the individual tax liability or to inflate refunds. She has been linked to 27 fraudulent returns. According to court records, Mitchell also filed returns seeking fraudulent refunds in the names of two people without their authorization, stealing their identities to do so.
She was also ordered to pay $137,483 in restitution.
Orange, Conn.: Landscaper Thomas Capecelatro, 64, has been sentenced to 60 days in prison, followed by a year of supervised release, for failing to pay over more than $66,000 in federal employment taxes.
According to court documents and statements in court, Capecelatro has owned and operated Chestnut Ridge Landscaping since approximately 1984 and from approximately October 2010 through 2013, he caused Chestnut Ridge to withhold $42,322.64 in payroll taxes from its employees but failed to account for and pay over that money to the IRS.
During that same period, Capecelatro failed to pay $24,089.28 in federal employment taxes and $1,347.54 in federal unemployment taxes that Chestnut Ridge owed. Chestnut Ridge also failed to file quarterly federal employment returns.
The total tax loss to the U.S. Treasury was $67,759.46.
Capecelatro pleaded guilty in November and in May made restitution of $67,759.46 for the delinquent taxes. He owes additional penalties and interest, and additional restitution for unpaid taxes, interest and penalties for the third quarter of 2005 through the third quarter of 2010.
Rock Island, Ill.: Preparer Roshaun Terry has been sentenced to 48 months in prison and ordered to pay $214,329 in restitution to the IRS for preparing false returns.
Terry waived indictment and pleaded guilty in September to preparing false income tax returns for others to generate refunds. From February 2010 to May 2015, Terry was responsible for the preparation of approximately 240 false returns that requested more than $500,000 in fraudulent refunds.
Portland, Ore.: Businesswoman Anna Ngo, 57, has been sentenced to 15 months in prison and ordered to pay nearly $500,000 in restitution for a tax evasion scheme.
According to court documents, Ngo, who previously pleaded guilty, evaded payment of her tax liabilities in 2004, 2005, 2007 and 2008 by placing two of her businesses, Hot Rocks Beauty Salon and Beyond Hair Nails Spa, in the names of nominees with the cooperation of her niece.
Ngo told the IRS she did not own the businesses and filed fraudulent income tax returns on which she failed to report income from the two businesses.
Investigation revealed that Ngo evaded payment of her outstanding tax liability; her evasion included “quitclaiming,” or relinquishing ownership of rental property she owned to her son shortly before federal income tax liens were filed in 2011.
Investigators also found that Ngo spent significant amounts of money at electronic stores, including $126,900 in 2011 alone, despite owing significant taxes and being aware of the liability.
Multiple audits revealed that Ngo owes more than $502,000 in taxes, penalties and interest for 2004, 2005, 2007 and 2008.
Phoenix: Carlita Frances O’Neal, 43, has been sentenced to 13 months in prison, to be followed by three years of supervised release, after pleading guilty to making a false claim against the U.S. in connection with her filing of a false return.
Co-defendant Jeannine Lynn Clark, 58, of Florence, Ariz., was sentenced to eight months in federal prison, followed by three years of supervised release. Clark also previously pleaded guilty to making a false claim in connection with her filing of a false return.
Between 2011 and 2013, the two prepared false returns for themselves and acquaintances using made-up income and withholding information, which enabled them to qualify for the Earned Income Tax Credit and to inflate refunds.
Clark recruited individuals into the fraud by claiming she could get them a large refund using only such basic information as their name, address, Social Security number and date of birth. O’Neal then used the information to prepare fraudulent federal returns and e-file them to the IRS. To inflate the false refunds, O’Neal used fictitious wage and withholding information for the taxpayers.
O’Neal received a portion of each false refund and paid Clark a referral fee for each individual Clark recruited. The pair later stopped working together but both continued preparing false returns on their own using the same fraudulent methods.
Between 2011 and 2013 O’Neal and Clark prepared and filed approximately 75 fraudulent returns and falsely claimed refunds totaling more than $300,000.
Both were ordered to pay restitution to the IRS.
Miami: Escort service owner Dennis Zarudny, 40, has pleaded guilty to filing a false return.
According to court documents, Zarudny filed a false individual income tax return for 2012 that underreported his total income from Elite Escort Service. The company was marketed on the Internet as a “prestigious escort agency providing 24-hour outcall escort services & adult entertainment for upscale gentlemen and couples in South Florida.”
For tax years 2011 through 2014, Zarudny filed false corporate and personal federal income tax returns that substantially underreported his business income. Zarudny allowed his customers to pay for the escorts’ services by cash, check and credit card. He reported income from credit card transactions but did not fully report the income he received from customers who paid in cash and check.
Sentencing is June 11. Zarudny faces a maximum of three years in prison, as well as a period of supervised release, monetary penalties and restitution.
Newark, N.J.: Car dealer Okoro Ifeanyi, 56, has been sentenced to 18 months in prison and three years of supervised release for filing false returns and structuring cash payments to avoid reporting requirements.
According to case documents and statements in court, Ifeanyi, who previously pleaded guilty, owned and operated Amiri Mbubu Auto Sales. His primary business was buying used cars in and around New Jersey, often at auto auctions, and exporting them to Nigeria.
Ifeanyi admitted to substantially underreporting his income on his 2010, 2011, 2012 and 2013 federal individual income tax returns, specifically failing to report additional taxable income that he earned through his business. According to authorities, Ifeanyi avoided paying some $461,085 in taxes.
He also admitted to structuring a series of transactions in 2007 and 2008 in which he made 17 deposits into his bank account, each less than $10,000 to avoid currency reporting requirements.
Nashville, Tenn.: Preparer Ironelly Mora, 39, has pleaded guilty to one count of preparing a false return.
According to court documents, Mora owned and operated the Latinos Unidos prep business. She admitted that from 2013 through 2017 she prepared and filed false returns for clients to help grow her business. Mora inflated refunds by claiming false child tax credits, exemptions and false filing statuses. Mora also admitted that she also filed her own false returns for tax years 2014 through 2016 by underreporting her income from Latinos Unidos.
Mora caused a federal tax loss of $379,540.
Sentencing is Aug. 3, when she faces a maximum of three years in prison as well as a period of supervised release, restitution, and monetary penalties.