Tax Fraud Blotter: Name games
Lots of loot, lots of cars; figures that didn’t add up; Fast time; and other highlights of recent tax cases.
LaPlace, La.: Preparer Shawanda Nevers, 49, has been sentenced to seven years in prison for filing fraudulent returns.
According to court documents, Nevers, a.k.a. Shawanda Hawkins, Shawanda Bryant and Shawanda Johnson, operated a series of businesses in the LaPlace area, including 3LJ’s Café Services & Sports Bar and 3LJ’s Industrial Service Solutions. Between 2011 and 2016, Nevers filed fraudulent income tax returns that included fake business losses, deductions and tax credits and sought undeserved refunds for clients.
Despite a federal judge permanently enjoining her in 2014 from preparing federal returns, Nevers continued to file fraudulent returns. She pleaded guilty last August.
Nevers was also ordered to serve a year of supervised release and to pay $6,934,764 in restitution to the IRS. She also was ordered to pay $128,900 to the Deepwater Horizon Oil Spill Trust and $964 to the Social Security Administration. In August Nevers pleaded guilty to filing fraudulent tax returns in August.
Powell, Ohio: Attorney Scott W. Atway, 44, has pleaded guilty to filing a false tax return.
According to case documents, for several years, including 2010 through 2013, Atway owned multiple Verizon Wireless stores in central Ohio aside and was also a self-employed attorney who operated his own practice. In 2013, he also generated income from a real-estate holding company for his rental properties.
Atway provided incomplete or false documents to his preparer and also made false statements to her when asked to justify how he paid for his lifestyle. During the above time period, Atway was building and improving a luxury home; he paid more than $800,000 to contractors for additions including an enclosed tennis court, basketball court, in-ground pool, six-car garage and an elevator. These expenses could not have been covered by the amount of taxable income Atway reported to the IRS.
He was also buying high-end cars, including a $99,000 Land Rover, a $50,000 Porsche 911, a $24,000 Lexus IS250, a $71,000 BMW X6 and a nearly $143,000 Audi R8. For these cars, he either received no financing or paid off the loans early, and the income he reported to the dealerships was much greater than what he reported on his returns.
For 2010 through 2013, Atway caused a tax loss to the U.S. of between $250,000 and $1.5 million.
Rochester, N.Y.: Preparer Jason Jimenez, 39, owner of prep service Fast Tax Cash, has been sentenced to a year in prison for his role in a scheme to file faked returns and collect inflated refunds, according to published reports.
News outlets said Jimenez conspired with employees to prepare false returns on behalf of numerous clients between January 2012 and February 2015. Authorities told news outlets that the returns were falsified to inflate the claimed Earned Income Tax Credit, netting a total of about $105,000 in fraudulently obtained refunds.
Co-defendants Jessica Rosario and Ashley Walker, also convicted of conspiracy, were each sentenced to three years of probation, reports said.
Memphis, Tenn.: Mark Stinson, an officer of a temporary staffing company, has been convicted of conspiring to defraud the U.S., failing to pay over employment taxes, filing fraudulent employment tax returns, theft of government funds and aggravated ID theft.
According to the evidence at trial, from 2005 through 2015 Stinson and his wife Jayton operated a temporary staffing company that provided services to businesses in Tennessee and elsewhere. The company’s standard contract with its customers provided that the staffing company was responsible for withholding and paying over federal employment tax.
The Stinsons failed to pay over $2.8 million in withholdings and other employment taxes due to the IRS, failed to timely file employment returns and filed false employment returns. To avoid making payments to the IRS, the Stinsons changed the name and structure of the company multiple times after accumulating employment tax liabilities, operating as Jayton Stinson Connex Staffing & Janitorial Service, Connexx Staffing Services, Connexx Staffing Services and Complete Employment Agency.
The couple also conspired to impede efforts by the IRS to collect on the employment tax liabilities. For example, the Stinsons made false representations to the IRS about their control of the staffing company and their knowledge of their responsibility to truthfully account for and pay over the employment taxes, placed the staffing company in the names of nominees who did not have control over the business operations, and established payment arrangements intended to impede an IRS levy placed on their customer payments.
The couple used the withheld funds to pay for personal expenses, including a Mercedes-Benz, a Cadillac Escalade, mortgage payments and private school tuition for their children.
Jayton Stinson previously pleaded guilty to conspiracy charges in connection with this case.
Mark Stinson also filed a fraudulent return for a relative that included a false dependent seeking a refund to which the relative was not entitled; Stinson received a substantial portion of the fraudulent refund.
Sentencing is March 1, when Mark Stinson faces a maximum of five years in prison for each count of conspiracy, theft of government funds and failing to pay over employment taxes, three years for each count of filing a false return, and a mandatory two years in prison for aggravated ID theft. He also faces a period of supervised release, restitution and monetary penalties. Jayton Stinson will be sentenced on Jan. 31.
Denver: Michelle Medina, 51, operator of a health care services company in Denver and Brighton, Colo., has pleaded guilty to tax evasion.
According to documents and information provided to the court, Medina owned and operated RHHS, also d.b.a. Reliable Home Health Services Inc. From 2008 through 2011, she concealed hundreds of thousands of dollars in personal income by having RHHS Inc. directly pay her personal expenses and by withdrawing cash from the company’s bank accounts for personal use.
Medina did not inform her preparer of this additional income and filed false individual income tax returns underreporting her income. Medina also failed to file 2008 through 2011 corporate income tax returns for RHHS.
She admitted that her actions caused a total tax loss of $550,000 to $1.5 million.
Sentencing is March 13, when Medina faces a maximum of five years in prison, as well as a period of supervised release, restitution, and monetary penalties.
Philadelphia: Preparer Idrissa Koita, 45 has been sentenced to two years in prison after pleading guilty to preparing and filing false federal returns, wire fraud and aggravated ID theft.
Koita worked as a preparer for the companies The Ledgerking and Medmans Financial Services. Between January 2009 and May 2012, he claimed false credits, false deductions and false dependents on federal returns for his clients to inflate refunds. During the same years, Koita also falsified his own personal tax returns by claiming false credits and false dependents.
Koita’s scheme resulted in a tax loss to the federal government of $2,073,567.54.
Koita will also be required to serve three years of probation and pay $60,911 in restitution.