A roundup of our favorite recent tax fraud cases.
Newark, N.J.: Preparer Sixto Rodriguez, 52, of Kissimmee, Fla., has pleaded guilty to filing a false tax return on behalf of himself for tax year 2007, and aiding and assisting in the filing of a false and fraudulent tax return on behalf of another for tax year 2009, resulting in tax losses of $321,061.
According to case documents and court statements, Rodriguez, who operated the Teaneck, N.J., tax prep firm 1-2-3 Taxes, admitted to inflating education credits, charitable donations, unreimbursed business expenses and rental losses that he knew his clients had not actually incurred. He also admitted reporting only $1,600 of the $237,179 his business made in 2007.
Both the false filing charges to which Rodriguez pleaded guilty carry a maximum of three years in prison and a $250,000 fine. Sentencing is Feb. 8, 2016.
Kansas City, Kan.: Preparer Prayshana Washington, 28, has pleaded guilty to one count of preparing false income tax returns and one count of aggravated ID theft in connection with preparing false income tax returns in the names of prison inmates.
In her plea, she admitted that from 2012 to 2015 she was in the business of preparing individual income tax returns for clients, who generally paid between $500 and $1,000 for her services. She admitted preparing a 2012 return for a client that included false claims about dependents, false household help income and false American Opportunity Credits.
She also admitted directing the IRS to deposit fraudulent returns onto prepaid debit cards and mail them to addresses she controlled and obtaining names, dates of birth and Social Security numbers for prison inmates and preparing fraudulent returns in their names.
Tax loss exceeded $400,000, authorities said.
Hacienda Heights, Calif.: Preparer Calvin Tyrone Ridgill, 61, has been sentenced to three years in prison and a year of supervised release for aiding and assisting in the preparation of false tax returns.
Ridgill, who was convicted in 1998 for preparing false returns, also agreed to be barred for life from aiding or assisting in the preparation of federal income tax returns for anyone other than himself and his legal spouse. A federal judge rejected Ridgill’s plea for leniency, finding that he had shown an egregious disregard for the tax laws.
According to the plea agreement, from 2010 through 2012, Ridgill prepared federal returns for clients claiming false or inflated income refunds based on false deductions, including phony losses from the sale of business property, Schedule E losses, mortgage interest deductions or false mortgage points. Tax losses exceeded $400,000.
Ridgill was ordered to pay $357,477 in restitution to the IRS. The government argued Ridgill’s assets were more than sufficient to pay the ordered restitution, including a home in Whittier and a vacation property in Truckee, Calif.
West Hartford, Conn.: Preparer Hai T. Le, 44, has been sentenced to 10 days of imprisonment, three years of supervised release and 240 hours of community service, and been ordered to pay full restitution to the U.S. Treasury for filing false tax returns.
According to court documents and statements, Le, who previously pleaded guilty, prepared federal returns for individuals in his community, many of whom were family or friends. Le typically asked clients to provide him their prior returns, purportedly so that he could verify relevant information.
Le prepared the current-year return, but also made and kept copies of the prior returns. After some clients received the current year’s refund, Le used the prior returns to prepare false amended returns purportedly on behalf of his clients.
The amended returns included false information, including unwarranted residential energy credits, education credits, and tuition and fees deductions to inflate phony additional refunds. Unknown to his clients, Le filed the amended returns with the IRS and included his own residence as the return address. In most cases, the IRS sent a refund check to the listed address and Le then endorsed his client’s name and his own on the reverse of the check to make it appear that the check had been signed over to him. He then deposited the check into one of his bank accounts.
Between March and August of 2010, he prepared and filed 28 fraudulent federal amended tax returns for a total of $138,826 in refunds. Six refunds totaling $32,752 were stopped prior to a check being issued. Le returned approximately $77,000 of the stolen money when confronted by the IRS and now owes the remainder with the ordered restitution.
Reseda, Calif.: Preparer Duffy R. Dashner, a.k.a. Kevin Dashner, 42, has been sentenced to 57 months in prison and three years of supervised release, and been ordered to pay $1,769,418 in restitution to the IRS after pleading guilty to one count of conspiracy to submit false claims.
According to court documents, Dashner and his co-conspirators, including Mark R. Maness, operated a business called O.I.D. Process through which they helped others to prepare and file individual federal income tax returns that claimed false original issue discount interest income and federal tax withholdings, resulting in fraudulent claims for refunds.
Dashner and Maness charged clients of O.I.D. Process a non-refundable registration fee to join the organization and a 20 percent “refund acquisition fee” for any refund check issued by the IRS. The pair also operated a Web site and conducted weekly conference calls with clients to promote their business and to assist clients in preparing and filing OID returns. Dashner and Maness required clients to change their mailing address with the IRS to the address of another co-conspirator who was an attorney in San Francisco.
O.I.D. Process’s clients filed approximately 200 OID returns claiming refunds that totaled approximately $228 million.
Maness, who previously pleaded guilty to conspiracy to submit false claims against the U.S., was sentenced in February to 41 months in prison and ordered to pay $1,176,668 restitution.
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