Tax Fraud Blotter: The artful dodger
Invented expenses; hidden returns, client gifts; skimmed immigrants; and other highlights of recent tax cases.
New York: Art dealer Mary Boone potentially faces months in prison after pleading guilty last year to two counts of filing false returns, news outlets said.
Prosecutors reportedly wanted Boone, who was scheduled to be sentenced in mid-January, to serve some three years in prison and said she defrauded the government by filing false returns and evading $3 million in taxes.
Boone’s lawyers asked that she be spared any prison time, writing that her offenses were the product of depression and anxiety brought on by childhood trauma rather than greed, reports added.
Newark, N.J.: New York CPA Christopher Miu, 58, has pleaded guilty to one count of subscribing to a return that he knew substantially understated his gross income.
According to case documents and statements in court, between 2008 and 2014 Miu failed to file income tax returns on his own behalf. When he ultimately filed returns for those years, he substantially under-reported his gross income, leading to a tax loss to the U.S. of more than $550,000.
The count to which Miu pleaded guilty carries a maximum of three years in prison and a fine of up to $100,000. Miu has also agreed to resolve his tax due. Sentencing is April 25.
Shawnee, Kans.: Preparer Geoffrey Rotich has pleaded guilty to aiding and assisting in the preparation of a false income tax return and making a false bankruptcy declaration.
According to court documents, Rotich owned and operated the prep business Inventax, and in March 2013 willfully aided and assisted in the preparation and filing of an individual’s 2012 individual income tax return that he knew contained false claims for education expenses and other deductions. Rotich also knowingly filed a fraudulent bankruptcy petition that failed to disclose his interest in Inventax and to completely identify all his bank accounts.
Sentencing is March 21, when Rotich faces a maximum of three years in prison for the tax count and a maximum of three years in prison for the bankruptcy fraud count. He also faces a period of supervised release, restitution and monetary penalties.
New York: Resident Scott Warner of Suffolk County, New York, has pleaded guilty to failing to account for and pay over federal employment taxes.
According to court documents, Warner owned and operated a temporary employment agency that did business under multiple names, including Around the Clock Staffing Inc., Your Staffing Service Inc., Your Staffing Services Inc., Revlis Consulting Corp. and City Consulting Corp. He was responsible for withholding federal income tax, Social Security and Medicare taxes from his employees’ wages, paying the taxes over to the IRS and filing employment tax returns.
Warner failed to pay over to the IRS approximately $687,480 withheld from employee wages from Oct. 2012 through Dec. 2016.
He faces a maximum of five years in prison, as well as a period of supervised release, restitution and monetary penalties.
Tucson, Ariz.: Preparer Joseph Michael Vosberg has pleaded guilty to preparing false returns for some of his clients over four years, according to published reports.
Prosecutors told news outlets that starting around 2012 Vosberg, who owned and operated Vosberg and Associates, prepared and filed false federal returns by using fictitious business losses and creating or inflating charitable contribution expenses for his clients.
They further told news outlets that Vosberg admitted that the total amount in false claims and expenses filed on clients’ returns for tax years 2012 through 2015 was about $458,000, resulting in a total tax loss of some $203,000.
Sentencing is March 13, reports added.
St. Louis: Preparer Rennell Mace has reportedly admitted to filing nearly 100 false returns.
According to published reports, he filed returns with false wage amounts to claim Earned Income Tax Credits for clients or false educational expenses to receive tax credits.
Mace, who now lives in the Atlanta area, and others in the scheme were paid $342,741 from 2009 through 2014, news outlets said, adding that he could face up to 24 years in prison.
Little Rock, Ark.: Husband and wife John and Wendy Dunn have been sentenced for defrauding the IRS.
John Dunn, 64, was sentenced to 33 months in prison to be followed by three years of supervised release and was ordered to pay $437,053.84 in restitution to the IRS on one felony count of conspiracy to defraud the government. Wendy Dunn, 51, was sentenced to five years of probation and was ordered to pay $127,401.18 in restitution after she pleaded guilty to five misdemeanor counts for willful failure to file returns.
Since at least 2002, the Dunns operated a quasi-financial consulting business but failed to file business and personal tax returns reporting this income. During an interview in 2011, John Dunn lied to federal agents when he said he timely filed his federal income tax returns each year and accused the IRS of hiding his returns. He also falsely told federal agents that neither he nor his wife had been employed for many years, but that a family inheritance allowed them to live in their $500,000 residence.
He also used a false Social Security number on bank accounts to disguise his ownership and made numerous false and frivolous complaints against IRS employees to thwart collection and investigative efforts.
John Dunn filed bankruptcy, and, with the assistance of co-defendant Nina Sue Williams, created fake returns with small amounts of income that he backdated and provided to the U.S. Bankruptcy Court to conceal his business activities and true earnings. In addition, he wrote “Gift” in the memo line of client checks he received for services to disguise the nature of the payments. He also attempted to persuade these clients to make false statements to federal investigators.
The couple pleaded guilty in June. Williams pleaded guilty in May to making a false statement to the IRS and willfully failing to file income tax returns; in November, Williams was sentenced to 24 months in prison and ordered to pay $103,201 in restitution to the IRS.
Sioux Falls, S.D.: Preparer Jacques Eviglo, 37, the owner of Global Income Tax Services, has been sentenced to nine years in prison on 30 counts of making false claims on returns and wire fraud, news outlets said.
His victims were reportedly first-generation immigrants who had no idea they were being scammed. He reportedly defrauded more than 1,400 of his clients by claiming large, false itemized deductions, expenses and losses. He then used a third party to receive and disburse his clients’ federal refund payments rather than having the payments directly deposited in their bank accounts, news outlets said, adding that he also skimmed additional fees.
Prosecutors told news outlets that Eviglo skimmed more than $800,000 over four years. He must pay more than $2 million in restitution, according to reports.