Tax Fraud Blotter: T time
Good move, Genius; thousands in gold coins; can’t afford to pay; and other highlights of recent tax cases.
Richardson, Texas: Preparer Rene Barrera Sr., of Del Rio, Texas, one of several preparers at Tax Genius in Richardson, has pleaded guilty to one count of aiding and assisting in the preparation of a fraudulent return.
In September 2016, Barrera and co-defendants Jimmy Luis Briseno, Mike Cano and Christopher Lee DeLeon were charged with conspiracy to defraud the IRS and other charges related to the filing of false returns. According to case records, from January through April 2011 Barrera admitted that he and other employees prepared and e-filed federal individual income tax returns that contained one or more of: false Schedules C; false and fabricated education credits; and false items to inflate the Earned Income Tax Credit.
Barrera caused the filing of eight false returns, resulting in a tax loss of $67,100.
Sentencing is December 14. Barrera faces a maximum of three years in prison and a $100,000 fine. He may also be ordered to pay restitution.
Lake Wales, Fla.: Business owner Tedderick Fields has received four years and three months in prison for filing false claims with the IRS.
According to court documents, Fields admitted to filing false returns in his name from 2011 through 2013. He reported wages that he had not earned from a business that he had incorporated, Dew’s T-Shirts and Accessories, and falsely claimed that he withheld federal income tax. In 2011, Fields filed a false return in his name, claiming that he had earned over $50,000 in wages and had withheld more than $14,000. The false claims resulted in a fraudulent tax refund of $7,775.
In 2012, he filed another false return in his name, claiming that he had earned $1 million in wages and had withheld $400,000. This false claim resulted in the issuance of a fraudulent refund check of more than $400,000.
Fields, who pleaded guilty in February, was also ordered to pay $7,775 in restitution.
Phoenix: Human resources administrator Tara Kathleen Valencia, 38, has been sentenced to 51 months of imprisonment to be followed by three years of supervised release, after pleading guilty to filing a false federal return, wire fraud and failure to appear in court.
Between 2006 and 2012, Valencia was employed by Arizona Exterminating Co. During this time she embezzled $852,253 from the company using business credit cards and checks for her own personal use. Some of her expenses included a home, medical and insurance expenses, food, maid services, salon and fitness expenses, home renovations, and a swimming pool and spa for her home.
She concealed her scheme by doctoring credit card and checking account records to make it appear as if these expenses were legitimate ones incurred by the company. Valencia also filed false federal income tax returns for 2008 through 2011.
Following her arrest on the indictment in July 2015, Valencia was released on her own recognizance. A few months later she fled to Mexico, where she remained a fugitive from justice. She was arrested by the Mexican authorities in November and returned to the U.S.
Valencia was ordered to pay $852,253 in restitution to her company and $252,806 to the IRS in back income taxes plus penalties and interest.
Lee County, Fla.: Resident Attila Kalmar has pleaded guilty to stealing government funds and corruptly endeavoring to obstruct internal revenue laws.
According to court documents, Kalmar filed 2007 through 2009 trust returns with the IRS in the name of First AK-Open Sec Trust, a nominee entity, seeking more than $480,000 in fraudulent refunds. Kalmar deposited a refund check he received as a result of these filings into a bank account and then used the proceeds to purchase real property, acquire thousands of dollars in gold coins and wire money overseas.
He also attempted to impede internal revenue laws by transferring funds between nominee bank accounts and falsely representing to the IRS that an IRS revenue officer was the trustee for First AK-Open Sec Trust.
Sentencing has not been set. Kalmar faces a maximum of three years in prison for corruptly endeavoring to impede the internal revenue laws and a maximum of 10 years in prison for theft of government funds. He also faces a term of supervised release, restitution, forfeiture and monetary penalties.
Hattiesburg, Miss.: Security company exec Michael Super, 44, has been sentenced to two years in prison, followed by a three-year term of supervised release, and was ordered to pay $165,075.92 restitution.
On Feb. 18, Super pled guilty to tax evasion for failing to pay federal employee trust fund taxes due on behalf of the employees of his company, Eagle Eye Security Services. Super had entered into an agreement with the government to pay these taxes over a period of time but made no payments.
The IRS issued levies against the company but Super still failed to make any payments. To avoid the levies, he opened another security business to which he transferred all of the assets and clients of his previous company. When the IRS pursued the assets of the second company, Super transferred all assets and clients to a third company.
The IRS collected some of the employee trust fund taxes due, but Super evaded paying $165,075.92.
West Palm Beach, Fla: Preparer Manuel Antonio Severino, 44, has been sentenced to 65 months in prison, three years of supervised release including six months of home confinement, and ordered to pay $524,556 restitution after being convicted of filing false federal returns.
On Feb. 23, a jury found Severino guilty of 13 counts of aiding and assisting in the preparation of false returns, two counts of wire fraud and two counts of aggravated ID theft.
According to the evidence, Severino operated a purported prep business from his home and submitted individual federal returns on behalf of others claiming false and fraudulent credits and deductions.
He falsely reported that the clients were entitled to the American Opportunity Credit, though he knew that the clients lacked qualified education expenses. Without his clients’ knowledge or consent he also diverted portions of the refunds to bank accounts that he controlled.
Over three years, Severino sought more than $1.6 million in federal refunds on behalf of himself and his clients, and diverted tens of thousands of dollars of refunds into his own bank accounts.
While on supervised release, Severino must complete community service: 1,000 hours a year if unemployed and 300 hours a year if employed.
Johnson Creek, Wis.: Former produce executive Thomas Paine, 64, has received 18 months in prison for tax evasion.
According to court documents and information provided to the court, Paine was the vice president and treasurer of G.W. Paine Inc., which sold fresh fruit and other produce under the business name Tree Ripe Citrus Co. He failed to file corporate returns for tax years 1997 through 2012 and concealed the income of the business from the IRS by structuring cash bank deposits in amounts less than $10,000.
Paine admitted to causing a tax loss of $250,000 to $550,000. He was also ordered to serve two years of supervised release and to pay $421,621.99 in restitution.
Lancaster, N.Y.: Businessman Ronald Wieczorek, 57, has pleaded guilty to tax evasion.
Prosecutors said that Wieczorek attempted to evade paying individual federal income taxes for 2000 through 2009, taking steps to hide his income and assets. For example, in 2009 he dissolved his business and created two new businesses, RMS Blacktop and RMS Hauling, in the name of another individual. He also used business receipts and money from these business accounts to pay personal expenses, including the payment of personal credit card expenses, forging the name of a person with signatory authority on the business account checks. Among Wieczorek’s other attempts to conceal his assets, he filed false statements with the IRS indicating that he could not afford to pay the taxes he owed.
The federal tax loss totaled $962,488.98. The charge carries a maximum of five years in prison and a fine of $250,000.