Pruned; car trouble; bad bets; and other highlights of recent tax cases.
Bethel, Connecticut: Bookkeeper Melissa Pezzolo of New Milford, Connecticut, has pleaded guilty to federal tax offenses.
For nearly 20 years, Pezzolo was office manager and bookkeeper for a nursery and landscaping services company, responsible for managing books and invoices, paying company bills and handling payroll and employment tax obligations. She also was responsible for coordinating with the company's tax preparer.
From around 2014 through 2018, she failed to file any 941s and to make any related payments of withholding taxes on behalf of the company. She continued to distribute paychecks to employees that withheld income and FICA taxes; she accounted for the withholdings on the employees' W-2s, which she continued to issue, though she did not provide the W-2 or pay the related withholding taxes to the IRS or the Social Security Administration. Pezzolo also failed to pay the company's share of FICA taxes.
Pezzolo further admitted that she stole thousands of dollars from her employer by giving herself unauthorized raises and by paying personal expenses using the company's corporate bank account and credit card.
She also neither withheld nor paid her withholding taxes to the IRS nor issued herself any W-2s between about 2010 and 2018. She also failed to pay her own income taxes.
She agreed to make restitution of $1,329,314, which reflects $1,170,992 in unpaid company payroll taxes and $158,322 in unpaid personal income taxes.
Pezzolo pleaded guilty to one count of willful failure to collect or pay over tax, and one count of tax evasion of assessment. Each offense carries a maximum of five years in prison.
Graham, Washington: Tax preparer Philippe Mbowamba, 53, has been sentenced to two months in custody and three months of home detention for tax fraud and aiding and assisting with filing false returns.
Between 2012 and 2019, Mbowamba operated a tax prep business. He claimed fraudulent deductions and credits on behalf of many of his clients, most of whom were immigrants from Africa and referred to Mbowamba by other members of the immigrant community. Mbowamba, a naturalized U.S. citizen, had originally immigrated from the Democratic Republic of the Congo.
He also falsified his own return, failing to report more than $56,000 in income for 2014. The tax loss on that one return was $26,531.
He filed 29 returns for others and for himself, with a tax loss of $141,392. He has agreed to make restitution for the full loss and has accepted a permanent injunction that bars him from preparing returns for anyone other than himself. The IRS may still level more civil tax, penalties and interest.
Bella Vista, Arkansas: Ronald Clark, owner of a garage door business, has pleaded guilty to attempting to evade federal taxes.
From 2015 to 2020, Clark evaded the assessment of federal income and employment taxes by operating his business in cash and failing to file individual income tax and employment returns. The tax loss totaled some $236,791.
Clark faces a maximum of five years in prison, as well as a period of supervised release, restitution and monetary penalties.
Cave Springs, Arkansas: Jonathan M. Wichman, a former general manager at car dealerships, has pleaded guilty to evading more than $263,000 in federal income taxes.
In 2018, Wichman accessed his employer's online payroll system and caused the dealership to not withhold any federal income taxes or employment taxes from his 2019 and 2020 wages. During these years, Wichman earned $856,882 in wages, including $360,739 from the dealership where he altered his federal withholdings.
He did not file his federal returns for 2019 and 2020 and also didn't timely file his returns for 2014 through 2018, despite receiving IRS correspondence asking why he hadn't filed. In 2018, the IRS filed substitute returns for Wichman for 2014 and 2016 and assessed additional taxes, which yet again he didn't pay.
He told investigators that he knew he owed past-due federal taxes and said he prepared his taxes using commercial software, and each year, the program showed he owed a large amount of taxes. Wichman claimed he did not have the money to pay his taxes, so he did not file his returns.
Investigation revealed that Wichman did have money to pay: From 2018 through 2021, he made cash transactions at various casinos and banks totaling more than $1,079,000. In addition, from 2014 through 2022, he spent more than $513,000 on luxury vehicles, a travel trailer and a Florida vacation.
In total, he did not pay $263,615 in income taxes to the IRS and failed to pay income taxes to the state of Arkansas. He agreed to pay restitution, including penalties and interest, to both the U.S. Treasury and Arkansas Department of Finance and Administration.
He faces up to five years in prison, as well as a period of supervised release, monetary penalties and restitution.
Austin, Texas: Canadian national William Henry Woo, 67, of Toronto, has been sentenced to 30 months in prison and ordered to pay $1,771,011.67 in restitution for making false statements on income tax returns.
Woo submitted duplicate and inflated refund requests to the IRS Service Center in Austin as a Canadian citizen seeking automatically withheld gambling winnings. In doing so, he defrauded the U.S. Treasury of nearly $1.8 million in refund money from 2006 to 2010.
Canfield, Ohio: Attorney Robert J. Rohrbaugh has been found guilty of conspiring to help two men illegally obtain more than $1.3 million from the IRS.
Rohrbaugh was convicted of conspiracy to commit offenses against the United States, aiding and abetting theft of government property, aiding and abetting false claims against the U.S., and conspiracy to commit money laundering.
Rohrbaugh assisted conspirators Brandon Mace and Terris Chanley Baker with obtaining a refund check for a fictitious business in the amount of $1,352,779.
In 2015, Mace and Baker obtained a bogus refund check for a fictitious business by using fabricated tax forms and listing false taxes and expenditures that showed significant tax overpayments. After obtaining the refund check, Mace and Baker worked with Rohrbaugh to deposit the check in accounts owned by them.
After cashing the refund check, Mace and Baker tried to launder the money by purchasing several high-end and luxury vehicles. Mace and Baker used $150,000 of the refund check to pay Rohrbaugh.
Mace pleaded guilty in 2020; Baker was convicted in April. Rohrbaugh's sentencing is May 16.
Las Vegas: Timothy Wilson of Phoenix, a Nevada-licensed dentist, has pleaded guilty to failing to pay taxes withheld from employees of his practice.
He owned and operated Starsmiles Children's Dentistry and was responsible for collecting and paying over to the IRS the income, Medicare and Social Security taxes withheld from employees' wages. From 2011 through 2014, he withheld these taxes from employees' wages but did not pay the withholdings to the IRS.
He caused a tax loss of $289,654.63.
Wilson will be sentenced on April 24. He faces a maximum of five years in prison, as well as a period of supervised release, restitution and monetary penalties.
