Phony IDs from far away; renounced citizenship, concealed assets; and other highlights of recent tax cases.
Allentown, Pa.: Barbara Gonzalez, 32, has received 12 months and one day in prison for using stolen IDs to file fraudulent returns.
According to documents filed with the court, Gonzalez worked as a preparer at MJ & Associates, a prep firm that also provided check cashing and other services. Gonzalez conspired with others to obtain the IDs of Puerto Rico residents and used them to file federal returns, fraudulently seeking approximately $635,594 in refunds.
She directed the IRS to deposit the refunds onto pre-paid debit cards and to mail them to addresses she and her co-conspirators controlled. The fraudulently obtained refund checks were cashed by other co-conspirators, including Jessenia Cordero, who operated MJ & Associates. Cordero was recently sentenced to 42 months in prison.
Gonzalez was also ordered to serve three years of supervised release and to pay $319,610.39 in restitution to the IRS.
Glendale, Ariz.: Preparer Karina Puerta, 37, of Phoenix, has been sentenced to 21 months in prison and been ordered to pay more than $250,000 in restitution.
Puerta, who previously pleaded guilty to wire fraud, owned and operated Taxes Y Mas. Beginning in 2011, Puerta submitted fraudulent returns using the names and identities of individuals in Mexico who were unaware their IDs were being used.
Puerta filed the fraudulent returns using a substitute ITIN issued in the name of the identity-theft victims.
Greensboro, N.C.: Local resident Hassie Demond Nowlin, a.k.a. Demond Nowlin and Brilliant Knowlin, 44, has pleaded guilty to corruptly endeavoring to obstruct and impede the IRS, filing a fraudulent return and bankruptcy fraud.
According to documents and information provided to the court, during 2008 and 2009 Nowlin filed several fraudulent returns with the IRS that included fake income and withholding taxes and sought more than $750,000 in fraudulent refunds. He also filed documents with local authorities purporting to renounce his United States citizenship and proclaiming to be a sovereign citizen.
Between 2008 and 2010, the IRS assessed taxes, penalties and interest against Nowlin related to the fraudulent returns. After being notified of the assessments, Nowlin began concealing his assets and placing them in the names of nominee entities.
Nowlin also admitted that between 2011 and 2017, he earned hundreds of thousands of dollars operating a prep business. Nowlin filed hundreds of returns for clients that claimed phony business and education expenses, sought refunds to which the clients were not entitled and did not identify him as the paid preparer. He caused the fees to be deposited into nominee bank accounts that he controlled, and also admitted that he made false statements to IRS agents, including that he did not prepare tax returns for clients.
He further admitted to filing fraudulent personal bankruptcy petitions. Along with these petitions, Nowlin also submitted false financial statements on which he did not fully disclose his income and assets.
Sentencing is Nov. 16, when he faces a maximum of three years in prison for impeding the IRS and filing a fraudulent return, and five years in prison for bankruptcy fraud. Nowlin also faces a period of supervised release, restitution and monetary penalties.
Concord, Va.: A local couple has pleaded guilty to tax and currency structuring charges. Barry Edwards, 53, pleaded guilty to corruptly endeavoring to obstruct the due administration of the internal revenue laws and Joanne Edwards, 50, pleaded guilty to filing a fraudulent return.
Both also pleaded guilty to conspiring to structure cash transactions.
According to the plea agreements and information provided to the court, Barry and Joanne Edwards created two purported religious missions in 2006, which they used as nominees to receive income Barry Edwards earned selling nutritional supplements. The Edwards deposited this income into bank accounts they held in the nominee names. The couple withdrew more than $475,000 in cash from the nominee accounts, in increments of less than $10,000 to evade bank-reporting requirements.
They deposited the funds into their personal bank accounts to pay personal expenses, including car payments and their children’s tuition. Barry also used cash to purchase a local five-acre farm.
The Edwards filed fraudulent 2013 through 2015 federal returns that did not report all of their income.
Sentencing is Jan. 18. The Edwards each face a maximum of five years in prison on the conspiracy count. Barry Edwards also faces a maximum of three years in prison for the corrupt endeavor to impair and impede the due administration of the internal revenue laws count; Joanne Edwards faces a maximum of three years in prison on the fraudulent return count. The Edwards also face a period of supervised release, restitution and monetary penalties.
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