Some of our favorite recent tax fraud cases.
Detroit: Preparer Gerald L. Hawk Jr., 29, has received 18 months in prison followed by two years of supervised release after pleading guilty to preparing false income tax returns.
According to court records, during 2009 Hawk prepared false income tax returns claiming the 2008 First-Time Homebuyer Credit. Hawk solicited clients by promising that he could acquire a refund of $8,000 to purchase a home by receiving the credit. Hawk knew the individuals did not purchase a home and had no intention of later purchasing a home after receiving the credit.
Hawk prepared or assisted in the preparation of approximately 21 false First-Time Homebuyer Credit returns claiming more than $147,000 in refunds. In addition to the sentence, Hawk was ordered to pay restitution.
Westerville, Ohio: Roma L. Sims, 35, has been sentenced to 100 months in prison and three years of supervised release and been ordered to pay $3,517,534 in restitution to the IRS for committing aggravated ID theft and wire fraud and for conspiring to commit ID theft in a scheme to defraud the IRS.
According to court documents, Sims, who pleaded guilty to this charge on Sept. 27, 2013, carried out a federal income tax refund fraud scheme between 2009 and January 2013. Sims operated under a variety of names, such as Last Minute Tax, Tax USA, Simply the Best Tax Service and X-Press Taxes & Accounting Services.
He conspired with Samantha Towns and Robert Earthman to carry out a scheme that generated more than $3.5 million in false refunds. The conspiracy involved the preparation and e-filing of fraudulent federal returns primarily on behalf of innocent persons from whom personal ID information had been collected. The returns sought fraudulent refunds that were then wired into one of several bank accounts controlled by Sims and Towns. Sims advertised on the Internet, through the mail and in print to collect personal ID information from low-income or unemployed single parents with children. The false returns always contained a false Schedule C and Earned Income Tax Credits.
In a March 2010 Craigslist advertisement, Sims purported to be a church giving money to needy families. He also placed weekly ads in cities all over the U.S. in the employment newspaper Jobs Weekly, and Earthman provided Sims with personal ID information from the Commonwealth of Kentucky child-support enforcement database.
Sims was responsible for the preparation and filing of some 977 returns for the 2010, 2011 and 2012 tax years, which netted more than $3.5 million in bogus refunds.
Towns, 32, of Reynoldsburg, Ohio, was sentenced last October to three years of probation, which included four months in a half-way house and six in home confinement; Earthman, 32, of Lexington, Kentucky, was sentenced in June to 24 months in prison and three years of supervised release (including six months in a half-way house). Both were also ordered to pay $1,312,513.89 in restitution to the IRS.
Minneapolis: Area resident Seth Mogollon-Flores was sentenced to 18 months in federal prison and ordered to pay $930,767 in restitution for filing false returns with the IRS seeking more than $2 million in phony refunds.
Mogollon-Flores conspired with preparer Maria Teresita Alvarez-Mateos, owner and operator of Express Income Tax, and with Yossimar Alarcon-Patino to file false returns that reported false income and fictitious dependents to claim fraudulent refundable child tax credits.
Other co-conspirators obtained and generated ID information from undocumented workers living and working in the U.S., as well as from individuals living in Mexico. This information was used to obtain ITINs that allowed the conspirators to prepare and file false returns in the names of some of those individuals and report some of those individuals as dependents on phony returns. Alarcon-Patino paid Mogollon-Flores to obtain W-2 information from working individuals, most of them in western Minnesota.
Both Alvarez-Mateos and Mogollon-Flores pleaded guilty to one count of conspiracy to defraud the government. On August 15, Alvarez-Mateos received two years in federal prison and was ordered to pay $1,733,679.08 in restitution. Alarcon-Patino pleaded guilty to charges of conspiracy and money laundering conspiracy and is scheduled to be sentenced on October 7.
Anchorage, Alaska: California residents Jameane Bolton-Williams, 39, and Joe Murl Douglas Jr., 54, have been sentenced as the result of their respective roles in a scheme to steal identities and file false returns. Bolton-Williams will serve 82 months in prison and pay restitution of at least $91,927.65; Douglas will serve 57 months and pay restitution of $43,043.55.
Bolton-Williams and Douglas conspired with two others to obtain ID information such as names, dates of birth and Social Security numbers, which were then used to prepare W-2s that contained fabricated wage and withholding amounts. The co-conspirators then took the phony information to tax prep services in Anchorage, Eagle River, and Palmer, Alaska, as well as in Los Angeles and Orange Counties, California, to have returns prepared and e-filed to the IRS.
The false returns requested refunds totaling between $1,400 and $8,600 each. In many cases, the defendants applied for refund anticipation loans and used the money to purchase personal items, including a Mercedes.
Co-defendant Lucille Stansberry was previously sentenced to 36 months and one day in prison and ordered to pay restitution of $48,619.95. A fourth co-defendant remains a fugitive.
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