Tax Fraud Blotter: Taming the beast
Now filling a cell; no EFIN, no problem; cleaning up but not filing; and other highlights of recent tax cases.
Cleveland Heights, Ohio: Preparer Immanuel Roddy, 35, has been sentenced to 42 months in prison and ordered to pay $892,902 in restitution to the IRS for preparing false returns and making false statements to law enforcement.
Roddy operated the prep service Roddy Solutions. He referred to himself in advertising as “Tax Beast” and obtained tax documents from clients, according to court documents; he then prepared false tax returns for his clients in which he claimed false tax credits or false business expenses.
Cordova, Tenn.: Dentist Andrea M. Henry, 45, has been sentenced to a year in prison for evading payment of taxes.
According to documents and information provided to the court, Henry owned two dental practices, The Henry Polk Dental Group DPC and The Smile Spa LLC. She filed personal federal income tax returns for 2005, 2006, 2008 and 2010 to 2013, but did not pay $113,781 in income and self-employment taxes.
Henry also failed to pay over the employment taxes withheld from her employees’ paychecks for numerous quarters between 2006 and 2015. The IRS assessed more than $160,000 in trust fund recovery penalties against Henry, making her personally liable for the unpaid employment taxes.
She spent hundreds of thousands of dollars on personal expenses, including private school tuition, expensive housing and luxury cars. After the IRS assessed penalties against her, Henry stopped using personal bank accounts and instead began using business accounts to pay for personal expenses. In early 2011, prior to her home being foreclosed on, Henry transferred $130,000 to a nominee buyer, entered a sham lease arrangement with the nominee to create a false explanation as to the source of the funds in the nominee’s bank account and caused the nominee to repurchase the home for her. She later used that same nominee and other nominees to purchase and lease exotic cars, including a Dodge Viper and a Porsche Panamera.
Admitting to causing a tax loss of $528,882.07, she was also ordered to serve three years of supervised release and to pay $653,116.78 in restitution to the IRS.
Franklin, Ohio: Preparer Vickie McNabb, 54, of Franklin, has pleaded guilty to aiding and assisting in the preparation and presentation of fraudulent federal income tax returns, impeding the due administration of internal revenue laws and wire fraud in a case involving a fraud of $378,954, according to published reports.
Cited court documents show that between 2009 and 2017 McNabb worked as an income tax return preparer or bookkeeper and filed fraudulent returns for many of her clients without their knowledge and embezzled money from two employers.
She reportedly prepared income tax returns for taxpayers and provided them with copies that showed their anticipated refund. But nearly 50 times, reports said, McNabb filed different federal returns that contained increased expenses, additional tax credits and additional schedules to inflate the refunds, and diverted the refunds into a bank account that she controlled. In those instances, news outlets added, the taxpayers received their anticipated refunds and McNabb received the difference. She also failed to list herself as the preparer on the filed returns, reports said.
McNabb also interfered with the due administration of the IRS by stealing payments provided to her by a taxpayer that she was supposed to turn over to the IRS in order to pay the taxpayer’s income tax liabilities, reports said.
Sentencing is April 19.
Shreveport, La.: Preparer Deborah A. Turner, 47, has pleaded guilty to filing false taxes for herself and her clients even after her EFIN was revoked.
Turner, who pleaded guilty to one count of making and subscribing a false return and one count of aiding and assisting in making and subscribing a false return, owned the prep service Tax Express Refund. The IRS revoked her EFIN in January 2014, but she instead started using her daughter’s EFIN to continue filing returns.
She filed numerous returns for clients for tax years 2011 to 2013 containing false information so they could claim deductions, credits and expenses to inflate refunds. She also filed a false individual tax return for tax year 2013 where she failed to report $336,865 of income.
Turner faces up to three years in prison, a year of supervised release and a $100,000 fine for each count. Sentencing is April 2.
Detroit: Braint N. Hall, owner of a janitorial service company, has been sentenced to a year and one day in prison for obstructing Internal Revenue laws and failing to file an individual tax return.
According to documents and information provided to the court, from approximately 2001 Hall owned Braint N Hall Inc., which also did business as Sunrise Janitorial Service, Sunrise Janitorial and Maintenance Inc. and Detroit Industrial Cleaners. To conceal his ownership of these firms, Hall caused two relatives to establish nominee entities, which he controlled, to assume their business operations, employees, equipment and client contracts.
Despite earning income from these businesses, Hall has not filed individual or corporate income tax returns since 2010.
In approximately 2009, the IRS began auditing Hall for his failure to file individual returns and to determine his income tax liability. Hall provided the IRS with false information about the ownership of his janitorial business, the business’ bank accounts and its client relationships.
Hall, who pleaded guilty in August, was also ordered to serve a year of supervised release.
Dover, Mass.: Insurance broker Anthony J. May, 62, has been sentenced to eight months in prison and a year of supervised release for filing false returns.
According to evidence at trial, May owned and operated Clients First Financial Insurance Agency through which he sold life insurance products as a broker, and Advantage Life Settlements LLC, through which he served as a broker for insured individuals seeking to sell their personal life insurance policies to third-party investors. May operated his businesses out of an office suite in Hingham, Mass., where he also leased office space to other independent insurance agents.
May filed 2006 through 2009 individual income tax returns that did not report more than $738,000 in income that he received from insurance commissions, brokerage fees and office rental payments.
May was convicted following a jury trial in May of filing false 2008 and 2009 returns.
San Leandro, Calif.: Preparer Eric Oase, 52, of Las Vegas, has pleaded guilty to filing false claims with the United States.
Oase admitted that he owned and operated the prep firm E&K Tax Solutions and acknowledged he knowingly prepared and filed numerous false federal income tax returns for others.
In 2012, he prepared 2008, 2009, 2010 and 2011 federal returns for clients that reported false wages, false education expenses, or both, that generated refunds. Oase efiled the 2011 returns and directed clients to mail their 2008 through 2010 returns to the IRS. He directed his clients to claim fraudulent refunds totaling $477,333.
Oase, who pleaded guilty to two of six counts of filing false claims, will be sentenced on May 24. The maximum for each count of filing a false claim is five years in prison and a fine of $250,000.