A roundup of some of our favorite new tax fraud cases.
Opelousas, La.: Frances Owens, 36, and Kevin White, 33, both of Washington, La., have pleaded guilty to one count of identity theft income tax refunds.
According to their plea, Owens worked as a tax preparer at Dee’s Tax Service in 2013 and filed false 2012 individual returns for at least two clients who didn’t authorize her to do so. Owens took steps to ensure that the victims’ refunds were sent to Dee’s instead of the victims’ residences. Owens and her boyfriend White then forged the victims’ signatures and obtained false IDs in the names of the victims to cash the checks.
The defendants face up to 15 years in prison, three years of supervised release, a $250,000 fine and an order to pay restitution.
Davie, Fla.: CPA Pamella B. Watson, 61, has been sentenced to 78 months in prison to be followed by three years of supervised release and been ordered to pay $3,684,921.20 in restitution for using her preparation business to facilitate an income tax refund fraud.
According to court documents, Watson, who previously pled guilty to one count of wire fraud and who operated Watson & Associates Business Services in Miami, prepared a return and provided a client a copy showing a refund amount or an amount payable to the IRS. Without the client’s knowledge or authorization, the figures on the return were changed and a return showing a higher refund amount was filed with the IRS. The client’s bank account received the refund amount reflected on the copy from Watson; the remainder of the refund went into an account controlled by Watson.
Court documents state that Watson prepared approximately 557 Forms 1040 for tax years 2010 through 2013 for clients and that some 71 percent had refunds split into an account controlled by Watson or the entire refund diverted into Watson’s bank account. From about January 2011 through September 2014, she deposited $3,405,479.20 of client refunds from 183 individual taxpayers into accounts she controlled.
According to court documents, Watson also diverted checks totaling $222,676 into her personal IRS account and an additional $56,766 in IRS payments from Watson’s clients was applied to an associate’s tax account. These checks were generated by clients who were informed by defendant Watson that they were paying their own tax liability.
Concord, N.H.: Preparer Okello Odongo, 36, of Snellville, Ga., has been indicted on 19 counts of filing false returns and fraudulently obtaining refunds.
Odongo is formerly of Manchester, N.H., where he operated Tax Smart Solutions Co. The indictment alleges that in 2011 and 2012 Odongo filed false returns on behalf of some clients that overstated the refunds owed and that he filed Allocation of Refund Forms that directed the IRS to electronically deposit the fraudulent portions of the refunds to bank accounts Odongo held or had access to. None of Odongo’s clients knew that he used their doctored returns as a vehicle to defraud the IRS.
Odongo has pleaded not guilty to the pending charges. Trial is January 5. If convicted, Odongo faces a maximum of five years in prison on each of the 19 counts.
Atlantic City, N.J.: Preparer Tinh Van Vo, 59, of Egg Harbor Township, N.J., has been convicted on 10 counts of aiding and assisting in the preparation of false returns.
According to documents filed in this case and the evidence at trial, Vo prepared and filed fraudulent U.S. individual income tax returns through his business, TVO Services. The returns attached schedules for fictitious educational credits, charitable contributions and job expenses, all to fraudulently inflate refunds.
Each false return count carries a maximum of three years in prison and a $250,000 fine. Sentencing is March 9.
Kalamazoo, Mich.: Preparer Fontrice Lenee Charles, 39, has been found guilty of 27 felony tax charges.
Charles, who ran the tax prep business #1 Tax Lady, was found guilty of 25 counts of filing false returns on behalf of clients between Jan. 17, 2011, and Feb. 4, 2014. Each of these counts carries a maximum of five years in prison and other penalties.
Evidence showed that Charles supplied false information to inflate refunds. Charles prepared a total of 967 phony returns during the three years above, resulting in some $4 million in improper refunds. The jury also found Charles guilty of filing her own false returns for 2010 and 2011 that inadequately reported her income and claimed a deceased person as a dependent. Each of these offenses carries a maximum penalty of three years in prison.
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