Some of our favorite recent tax fraud cases:
Laredo, Texas: Preparer Michelle A. Morin has been arrested following the return of a 14-count indictment alleging she aided and assisted in the preparation of false and fraudulent income tax returns.
The indictment alleges that between tax years of 2007 to 2010, Morin helped prepare false and fraudulent 1040s that included fake business losses, interest and taxes paid, gifts to charity, job expenses and miscellaneous deductions, as well as residential energy credits. She is accused of assisting in the preparation of 14 fraudulent returns for seven taxpayers during the four-year-period, resulting in a total loss to the government of more than $220,000.
If convicted, Morin faces a maximum three years in prison and a $250,000 fine on each count. She was released on $75,000 bail after surrendering her U.S. passport.
St. Louis: Preparer Christopher Mickles has been charged with four felony counts of aiding and abetting in the preparation of false returns.
Mickles, owner and operator of Discount Tax Service, is charged in connection with preparing more than 750 federal income tax returns for clients during tax years 2008 through 2011. Many of those returns falsely claimed fraudulent items and credits, such as household-help income and EITCs.
If convicted, he faces a maximum of 12 years in prison or a fine of up to $400,000, or both.
Maplewood, N.J.: Preparer Carlyle Fraser, owner of Fraser CPA and Taxko Inc., has pleaded guilty to his role in preparing returns with false information. He was charged with one count of aiding and assisting in the preparation of false individual income tax returns.
According to case documents and statements in court, from 2008 through 2011 Fraser prepared and filed false returns for his clients. On April 8, 2011, he prepared a false 2010 individual income tax return for an undercover agent, which claimed false deductions for medical and dental expenses, charitable contributions, unreimbursed employee expenses, tuition, a business loss and a capital gains loss.
Fraser, who caused a tax loss to the IRS of $149,739, faces a maximum of three years in prison and a fine of $250,000. Sentencing is June 25.
Cincinnati: Preparer Kesha Spencer, 39, has pleaded guilty one count of aiding and assisting in the preparation of false federal income tax returns.
According to court documents, Spencer operated the tax prep business Tax Cash Sooo Fast, where she prepared and e-filed some 200 false returns for each of the 2010 and 2011 income tax years. The returns falsely reported household income, head of household filing status and dependents, and also falsely claimed refundable credits, including the EITC, the Making Work Pay Credit and the American Opportunities Credit. Some of the returns prepared and filed by Spencer were entirely fictitious, including those filed on behalf of several individuals in jail at the time. The tax loss came to some 103,541.97.
Spencer also filed false 2010 and 2011 individual income tax returns for herself that omitted most of the income she earned from preparing returns through Tax Cash Sooo Fast and omitted unemployment compensation she received in 2010 and claimed false Schedule A and Schedule C expenses. Tax loss associated with the filing of these returns was $33,245.27.
Spencer was released on bond and will be sentenced on June 3, when she faces a maximum of three years in prison and a fine of up to $100,000.
Plantation, Fla.: The United States has asked a federal court to permanently bar Keisha Stewart and her company, Professional Tax Services Inc., from preparing federal returns for others. According to the complaint, Stewart and her company prepared federal income tax returns that inflated income or included fictitious income to qualify clients to receive or maximize the EITC.
The complaint states that Stewart also claimed credits for refunds or to decrease tax on her clients’ returns, including false education and residential energy credits. According to the complaint, Stewart also falsely claimed head of household status on behalf of clients who did not qualify to decrease their tax liabilities. Stewart also allegedly claimed false dependents on behalf of clients and claimed the child and additional child tax credits on behalf of those clients. Allegedly she typically included these items on clients’ returns without their knowledge.
The government claims Stewart’s returns cost it more than $1.6 million annually during the tax years 2010, 2011 and 2012.
New York: Former police officer and moonlighting preparer Jonathan Wally, 34, has received five years’ probation for tax fraud and ID theft related to his preparation and filing of false and fraudulent individual income tax returns.
According to case papers, from 2003 until his arrest last April, Wally was assigned to the 34th Precinct in the Washington Heights/Inwood section of Manhattan. Since at least 2008, he was a tax preparer registered with the IRS. Although the NYPD requires officers to obtain written authorization to engage in off-duty employment, Wally never sought or obtained such authorization.
From 2010 through April 2012, he defrauded the IRS out of refunds to others based on fraudulent and false tax returns he prepared and filed. The returns claimed, among other things, false deductions for dependents. Continuing through January 2013, Wally also prepared and filed returns on his own behalf that claimed false dependents and failed to declare certain income. In connection with this scheme, he obtained the personal ID information and Social Security numbers of children and declared those children as dependents on returns he prepared and filed on behalf of others and himself.
The IRS paid these taxpayers at least $146,818 in fraudulent refunds, and fraudulent returns prepared and filed by Wally caused the IRS to pay him at least $48,990 in bogus refunds. In total, Wally’s scheme defrauded the IRS of $195,808.
Wally’s probation will include six months of intermediate confinement and one year of electronic monitoring to run concurrent to confinement. In addition to probation and intermediate confinement, Wally, who pleaded guilty in August, was ordered to pay a $400 special fee and $195,808 in restitution to the IRS.
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