Some of our favorite recent tax fraud cases.
Jasper and Beaumont, Texas: Preparer Derek Cornelius Briscoe (a.k.a. Terrance Briscoe and Derek Anderson), 36, of Jasper, and Angela Dunaway (a.k.a. Angela Coudrain), 45, an inmate in Jefferson County Jail in Beaumont, have been charged with one count of conspiracy to commit wire fraud. Briscoe was also charged with eight additional counts of preparing false returns.
According to information presented in court, Briscoe held himself out as a preparer, sometimes doing business as Thaferrets Tax Service, from his residence. He maintained contact with female inmates at the Jefferson County Jail and offered those inmates a fee in exchange for personal ID information of other inmates he could use to file false returns. Dunaway was one of those inmates.
The information was transmitted to Briscoe via recorded collect calls placed from the jail. Briscoe also used JPay, designed to facilitate communication and financial transactions between inmates and non-inmates, to transmit money to conspirators and inmates.
The false returns contained phony wage, income and employment information, false education credits, false Making Work Pay Credit forms, and false or nonexistent home addresses for taxpayers.
Brisco and Dunaway aided in the preparation and e-filing of more than 500 false federal income tax returns for the tax years 2009, 2010 and 2011, and requested fraudulent refunds in excess of $1 million.
If convicted, both face up to 20 years in federal prison for the count of conspiracy to commit wire fraud; Briscoe faces an additional three years in prison for each of the eight counts for preparing false returns. He also faces the forfeiture of his personal residence in Jasper.
Dallas: Preparer Kenny Iroegbu has been sentenced to three years in prison and ordered to pay $323,046 restitution to the IRS after admitting to a federal felony stemming from his preparation of false returns.
According to case documents, Iroegbu, who pleaded guilty in December to one count of aiding and assisting in the preparation of a false income tax return, owned and operated Homequest Vision Tax Service and Homequest Tax Service. Prior to starting his own prep business in 2005, he interned at Lynks Tax Service in Greenville, Texas.
Iroegbu’s scheme included filing a client’s return using false Schedules F or C. He would include the false schedule on the return and typically claim a loss if the client had W-2 wages or claim a net profit if the client did not. He also falsified fuel credits and taxes paid.
Authorities said Iroegbu prepared and e-filed 66 tax year 2006 returns and 59 tax year 2007 returns claiming $1,294,749 in fuel credits, of which $361,294 in false refunds was used by the IRS to offset any tax owed on the return. The remaining amount was paid to the taxpayers. Twenty-four fraudulent returns examined claimed refunds for his clients totaling $237,996, of which the government paid $126,582.49.
San Diego: The U.S. has sued a former attorney and CPA to bar him from promoting and implementing tax fraud schemes and preparing returns for others.
The suit alleges that Lawrence Preston Siegel (a.k.a. Larry Lave, Yehuda Lave and Larry Easy) falsely represented that he is a licensed attorney and CPA in order to solicit business for his tax practice.
According to the civil injunction suit, Siegel pleaded guilty to one count of tax evasion and two counts of subscribing false tax returns in 1994. He subsequently resigned from the California bar in 1994, lost his CPA license in 1997 and never regained either accreditation, according to the suit.
The complaint alleges that following his release from federal prison in 2001 for additional convictions, Siegel established a tax practice and stated online that he is an “[i]interesting combination of a Tax Lawyer and CPA who is also a Rabbi trained in Spirituality.” Siegel, the complaint alleges, claimed to others that his “goal as a spiritual Rabbi, Tax Attorney and CPA is to save people money without going to jail Everybody wants to pay very little tax, I do it legally and morally under the Torah.”
According to the complaint, Siegel falsely advised his customers, typically high earners who own profitable businesses, that they can establish companies in Nevada and treat their California home as an out-of-state corporate office. He falsely claimed that doing so would transform a vast array of non-deductible personal expenses into deductible business expenses, according to the suit.
According to the complaint, Siegel boasted about this scheme in e-mails, including one where he falsely claimed that his customers are entitled to free housing as tax-free compensation from their out-of-state companies and that “The housing can [b]e luxurious and cost thousands a month” because “[t]here is an assumption that corporations don’t waste money.”
In another scheme, Siegel advises clients to enter into sham license agreements to purportedly lease their professional skills and expertise to the out-of-state companies Siegel established for them, according to the suit. Under these agreements, the companies paid royalties to the clients in exchange for use of the clients’ professional skills and expertise, according to the complaint.
Siegel allegedly promoted and implemented this scheme to mischaracterize the income that clients received from their out-of-state companies, which is subject to employment taxes, as royalty payments, which Siegel falsely claimed as exempt from employment taxes.
The complaint alleges that, in conjunction with his fraud, Siegel prepared client returns and, in some instances, filed returns without obtaining his clients’ permission to file. In preparing returns, Siegel falsely claimed clients’ personal purchases as deductible business expenses, including purchases at Tiffany and Louis Vuitton, and with Royal Caribbean Cruise Lines and Princess Cruise Lines, according to the suit.
Siegel attempted to conceal these false deductions from the IRS by reporting them as large expenses for “supplies” or “medical records and supplies,” according to the government’s complaint.
Also according to the complaint, Siegel also attempted to delay and obstruct IRS examinations of his customers. He allegedly provided false corporate documents to the IRS to deceive auditors, produced bogus contracts to IRS auditors, and lied to IRS officials during U.S. Tax Court litigation when asked to confirm information on behalf of his customers, according to the suit.
Doral, Fla.: The U.S. government has filed seeking to bar Eleuterio Almanzar, Almanzar Tax Accounting & Consulting Corp. and Almanzar Financial Services Corp. from preparing federal returns for others.
The complaint alleges that Almanzar prepares federal income tax returns for clients that understate owed tax or seek inflated refunds. According to the government’s complaint, the understatements result from improper education credits, First-Time Homebuyer Tax Credits, EITCs, charitable deductions and business expense deductions that Almanzar claims for clients without required due diligence and despite the absence of supporting documentation.
Several of Almanzar’s clients told the IRS that the improper deductions and credits were not based on information they provided to Almanzar, and that they did not know that the deductions and credits had been taken on their return until after filing.
The complaint also seeks to enjoin Almanzar from using a false or fictitious federally issued ID number, including Social Security numbers, EFINs, EINs, TINs and PTINs, to file or remit federal returns. The government is also asking to have Almanzar provide a list of all persons for whom he prepared federal returns or claims for refund since Jan. 1, 2009.
According to the complaint, the average per-return tax deficiency for the returns the IRS examined since 2009 was $3,249. Losses to the U.S. could be in the millions of dollars.
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