A selection of our favorite recent tax fraud cases.
Allentown, Pa.: Tax preparer Carmen Basilis, a fugitive and owner of Basilis Tax Services, has been arrested on a 58-count indictment charging tax violations.
Basilis, on the run since her indictment in September 2011, is charged with willfully aiding and assisting in the preparation and filing of false federal income tax returns. According to the indictment, she prepared false returns for tax years 2005 through 2008 by inflating expenses, deductions and dependency exemptions to generate oversized refunds.
If convicted of all charges, Basilis faces a maximum of 174 years in prison and a fine of $14.5 million.
Alexandria, Va.: Preparer Sean M. Weaver, 33, has pleaded guilty to mail fraud and money laundering for filing false claims resulting in over $20 million in sales and use tax refunds to two corporate clients.
Authorities said Weaver was a member of the transaction tax practice group in the Arlington, Va., office of Ryan LLC, a tax services firm headquartered in Dallas. The group specialized in submitting claims to state and local taxing authorities to obtain refunds of sales and/or use tax overpayments made by Ryan LLC’s corporate clients in exchange for a fee or a percentage of the overpayments that it recovered on behalf of its clients. Weaver managed a team of 10 to 15 employees and was responsible for submitting claims to the state taxing authorities, and received a percentage of the fee received by Ryan.
Between October 2011 and December 2014, Weaver submitted several false claims for sales and/or use tax refunds to the Virginia Department of Taxation and the Texas Comptroller of Public Accounts on behalf of two of Ryan’s corporate clients. In submitting the false claims, Weaver manipulated client transactional data and falsified invoices and other transactional records to inflate the amount of sales and/or use tax actually paid by the clients during certain transactions.
As a result of the scheme, the state taxing authorities issued more than $20 million in fraudulent refunds to Ryan clients; Weaver received more than $350,000 in personal bonus payments.
Ryan voluntarily reported Weaver’s actions to law enforcement and fully cooperated in the investigation. As part of the plea agreement, Weaver admitted that he acted alone and that no one from Ryan or its clients took part. He further agreed to forfeit $250,480 seized by the federal government as property involved in the offense and the value of his account with a peer-to-peer lending company.
Weaver faces a maximum of 30 years in prison when sentenced on Dec. 1.
Denver: Georgia tax preparer Sorletta Capri Shead has turned herself in to authorities for multiple crimes, including filing false tax returns and ID theft. The Georgia Department of Revenue opened an investigation into Shead’s tax business after noticing a pattern of fraud with her submissions. Subsequently the State of Georgia blocked all returns filed by her; no losses were reported.
Cleveland: Preparer Towhidul Hussain, 36, of Middleburg Heights, Ohio, has been charged with operating a tax fraud conspiracy in which he and others knowingly and willingly prepared and filed dozens of inflated tax returns, sometimes in return for cash kickbacks.
Hussain was charged with one count of conspiracy to defraud the U.S. and three counts related to assisting with the preparation of false returns.
Hussain operated a tax prep business through a franchise agreement with Liberty Tax Services, and had no training or experience in tax return preparation before buying the franchise, according to authorities.
Hussain hired a woman identified in the charges only as “Co-Conspirator 1” who showed Hussain how to add false information to returns to inflate clients’ refunds, including false medical expenses and education credits and other false deductions.
In the fraud, which took place between 2011 and 2014, Hussain and his accomplice directed some clients to take refund checks to a neighborhood check-cashing store. Once the check was cashed, Hussain and the accomplice received a portion of the refund.
In 2012, Hussain received more than $20,000 in kickbacks from clients, authorities claimed.
Kansas City, Mo.: Chiquita Tyler, a.k.a Chiquita Robinson, 34, of Wylie, Texas, and formerly of Kansas City, has been sentenced to seven years in federal prison and been ordered to pay $343,889 restitution for scamming more than $454,000 in income tax refunds. On Oct. 29, Tyler pleaded guilty to making a false claim to a federal agency and to ID theft.
Between February 2010 and February 2011, Tyler prepared and filed false returns using stolen Social Security numbers for approximately 70 individuals. Tyler, who told numerous individuals that she was a tax preparer to obtain their personal information, prepared and e-filed the returns through Turbo Tax, falsifying wages, education expenses, addresses, occupations and, in some cases, the names of dependents.
Tyler directed refunds to a prepaid debit card mailed to her at her home address and other locations in Kansas City, Mo. She claimed a total of $454,363; the actual loss was $343,889 because some of the fraudulent claims were discovered by the IRS before payment.
According to court documents, Tyler has been charged and convicted numerous times, including convictions for assault, false ID, forgery, stealing, passing a bad check, and larceny. She was on probation for one of two assault charges when she was convicted of forgery. She also has active bench warrants from Barton County, Mo., and Kansas City, Mo.
Winchester, Ky.: Preparer Virginia Christine Smith, 44, has pleaded guilty to submitting false individual income tax returns and evading paying thousands of dollars in federal income taxes. According to her plea agreement, Smith knowingly underreported income on her personal returns in 2009, 2010 and 2011. During that time, she owned the tax prep business Christina’s Bilingual Service, operated out of her home. Smith admitted failing to pay $40,079 in federal taxes and pledged to repay that amount to the IRS, plus penalties and interest.
Las Vegas: Local resident Alicia Gambrell, a receptionist at an area tax prep service, has confessed and pleaded guilty to bank fraud and aggravated ID theft in connection with stealing $114,000 using clients’ personal information, according to published reports.
Authorities reportedly said she used personal information from tax records to apply for credit cards and services in other people’s names. Postal inspectors were alerted when several ID theft cases appeared to lead back to the tax firm, news outlets said, and one of the firm’s employees reportedly saw sensitive files slip out of Gambrell’s bag.
A search of Gambrell’s home turned up TVs, electronics and financial documents in other people’s names, according to reports, which added that she was sentenced to three years in prison and was ordered to pay back $114,000.
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