Loan wolf; collection plate; Tony who?; and other highlights of recent tax cases.
Augusta, Georgia: Allen Brown, 41, operator of a ghost prep business has been sentenced to 46 months in prison after pleading guilty to wire fraud conspiracy.
In 2022 and 2023, Brown and several individuals operated a ghost prep business at three Augusta locations, including a church and Brown's residence. Brown failed to identify himself as a paid preparer on the federal income tax returns that he prepared and filed for clients.
He fabricated income to qualify his clients for tax credits, claimed fake deductions to inflate refunds and charged clients a fee based on a percentage of the refund. Brown did not provide his clients with a copy of the returns he prepared, nor did he review the returns with clients before e-filing them with the IRS.
Brown and other ghost preparers who worked with him falsified 63 federal income tax returns for clients, causing the Treasury to issue $1,003,631 in false refunds. (Brown required his clients to pay him 10% of each refund obtained.) The scheme offered clients the "Standard" or the "I'm Not Scared" filing option, with the former generally resulting in a fraudulent refund of $2,000 to $9,000. The "I'm Not Scared" option resulted in a fraudulent tax refund of $14,000 to $30,000.
For the latter, Brown instructed his ghost preparers to falsely claim Fuel Tax Credits and falsely report gross income and other expenses on Schedule C and medical and dental expenses on Schedule A. For the "Standard" option, Brown instructed preparers to falsely claim Sick and Family Leave Credits and other false items.
Brown was also ordered to pay $1,003,631 in restitution and to serve three years of supervised release.
Gaithersburg Maryland: Accountant Harold Dotson, 54, has been sentenced to three years in federal prison, to be followed by three years of supervised release, in connection with a conspiracy to commit wire fraud affecting financial institutions.
The fraud involved submitting more than $24 million in fraudulent CARES Act loan applications. Beginning in April 2020, and continuing through January 2022, Dotson engaged in multiple wire frauds involving submitting fraudulent loan applications for various COVID-19 relief benefits.
He was the owner and principal of H&M Tax Service, d.b.a. H&M Financial Group, a tax prep business, during the time of the conspiracies. He used his accountant expertise to assist with preparing numerous false and fraudulent Economic Injury Disaster Loans and Paycheck Protection Program applications for purported businesses that did not exist in any legitimate capacity. The fraudulent loan applications included false information about the phony businesses' number of employees, monthly payroll and revenue.
Dotson also routinely created false IRS forms for co-conspirator Ahmed Sary, 47, of Brooklyn, Maryland, and other conspirators to submit with the false PPP applications. (Sary has been sentenced to seven years in prison in connection with the conspiracy.) In return, Dotson received a percentage of the fraudulent loan proceeds, ranging from 2% to 27%.
He received more than $828,498.95, primarily using the money to gamble at various casinos in Maryland and for a gambling trip to Las Vegas.
Dotson's conspiracy with Sary resulted in the disbursement of $14,807,609.37 in fraudulently obtained PPP funds in connection with more than 85 fraudulent PPP loans. Dotson's conspiracy with another co-conspirator resulted in the disbursement of at least 30 fraudulent PPP loans valued at least $6,499,823.12. More than $3.5 million was funded and disbursed in connection with Dotson's submission of fraudulent EIDL applications.
Dotson was also ordered to pay $24,807,432 in restitution.
Scranton, Pennsylvania: Vincent Guntur of Dunmore, Pennsylvania, and Angelica Jones of Hauppauge, New York, have both pleaded guilty to one count of failure to remit employment taxes.
From around 2018 through the third quarter of 2024, Guntur and Jones owned and operated four companies in the business of temporary employee staffing. Guntur and Jones were responsible for collecting, accounting for and paying over federal employment taxes for their companies' employees. Guntur and Jones willfully failed to collect, account for, and pay more than $1.3 million in employment taxes due and owing to the IRS during that time.
Both Guntur and Jones agreed to make full restitution of the employment taxes due and owing. They face a maximum of five years of imprisonment, a term of supervised release following imprisonment and a fine.
St. Augustine, Florida: Robert George Morgen Jr. has pleaded guilty to willfully making a false return.
According to court documents, in March 2019, Morgen submitted a false return for the 2017 tax year. Morgen knew that when he signed his return that his gross receipts and income were higher than reported.
Due to multiple years of false reporting, Morgen owes the IRS $280,910 in back taxes.
Morgen faces up to three years in federal prison. He has also agreed to pay $280,910 in restitution to the IRS.
Mountain Top, Pennsylvania: Former tax collector Karen McGinnis has pleaded guilty to embezzling public funds.
From March 2023 to January 2025, McGinnis was the tax collector for a local township from which she embezzled more than $400,000 in property taxes.
McGinnis, who resigned as tax collector in March, has agreed not to seek public office for the longer of three years or any term of probation imposed, and she agreed to make full restitution of the money embezzled.
Farmington, Connecticut: Business owner Angelo Delmaro has pleaded guilty to tax evasion.
Since at least 2012, Delmaro has owned and operated commercial roofing businesses in Connecticut, initially doing business as Value Roofing, then Roofing Services of New England and most recently as Roofing Services. The businesses also provided paving services. None of Delmaro's companies registered with the Connecticut Secretary of State or had a federal TIN.
From 2012 to 2022, Delmaro's companies earned some $12.7 million in customer receipts, but Delmaro paid his workers in cash, never filed income or payroll tax returns for himself or the business and took several steps to conceal income and operating expenses from the IRS. Delmaro and others associated with his business cashed checks from customers at various check cashing businesses instead of depositing them into bank accounts; Delmaro provided the check cashers with addresses associated with UPS mailboxes rather than his home address so when the check cashers filed Currency Transaction Reports, the IRS only had a UPS mailbox location to try to identify source of income. He also had customers file false 1099s made out to a family member, rather than his business, or made out to Delmaro himself.
At times, when a customer requested that Delmaro provide a completed "Request for Taxpayer Identification Number and Certification," Form W-9, Delmaro worked with his father to prepare a false W-9 that included the name and Social Security number of his father and a UPS mailbox address. Delmaro sometimes provided customers with W-9 forms using false identities, such as "Harvey Rubino" or "Tony Stano," which the customers used on the 1099. Delmaro's father also used an alias, which differed from the name and information Delmaro provided to the customer.
Delmaro has agreed to pay restitution of $630,869 to the IRS. Sentencing is Jan. 21.
