Some of our favorite recent tax fraud cases.
Ft. Worth, Texas: Preparers and married couple Jacqueline and Gladstone Morrison have been found guilty by a federal grand jury on 18 counts of conspiracy, tax offenses and wire fraud charges.
The couple, who operated Jacqueline Morrison & Associates in Arlington and Fort Worth, Texas, conspired to prepare and file false and fraudulent individual income tax returns. The Morrisons and JMA preparers, whom they trained, used false substantial losses on Schedule Cs to offset wage income, resulting in clients recovering all or most of their tax withholding. The Morrisons also charged higher fees for additional schedules, creating client loyalty and increasing business through client referrals.
The Morrisons also developed forms for clients to sign intended to protect the couple by placing all responsibility for any false return information on the client.
The Morrisons collected more than $2 million in fees from clients, then attempted to use JMA’s fraud to build a large client list that they leveraged into a lucrative franchise agreement with Express Tax Services, a subsidiary of H&R Block. After they entered the franchise agreement, however, the IRS terminated the Morrisons’ EFINs because of fraudulent activities. To conceal that fact and perpetuate the continuation of the franchise agreement, the Morrisons gave Express Tax EFINs belonging to a business associate.
Regarding the wire-fraud offenses, the government said that the franchise agreement provided for the payment of $750,000 from Express Tax to the Morrisons. To secure the agreement, the Morrisons falsely represented to Express Tax that JMA was not under investigation, when in fact they knew JMA was the subject of an IRS criminal investigation.
Unknown to Express Tax, the Morrisons agreed to sell JMA to an individual named “V.H.” Gladstone Morrison told V.H. that JMA’s relationship with Express Tax was nothing more than a “co-branding” or “co-marketing” agreement. Gladstone Morrison also tried to prevent Express Tax from learning they had executed an agreement to sell JMA to V.H. by falsely telling Express Tax that V.H. was only the Morrisons’ office manager.
By entering into parallel agreements with separate entities — Express Tax and V.H. — the Morrisons received payments from both entities for the same asset.
When the Morrison’s agreements with both Express Tax and V.H. fell apart, they again tried to profit by selling JMA to RealTex Ventures LLC, owned by “D.A.,” for $425,000. Again, the Morrisons represented that JMA was not under investigation when it was.
Specifically, the husband and wife were each convicted on one count of conspiracy to aid and assist in the preparation and presentation of false and fraudulent returns. Jacqueline Gladstone, who is a CPA, was also convicted on 13 counts and Gladstone Morrison on 12 counts of aiding and assisting in the preparation and presentation of false and fraudulent returns. Jacqueline was convicted on three counts and Gladstone on four counts of wire fraud.
The conspiracy count carries a maximum of five years in federal prison and a $250,000 fine. Each count of aiding and assisting in the preparation and presentation of a false and fraudulent return carries a maximum of three years in federal prison and a $250,000 fine. Each count of wire fraud carries a maximum of 20 years in federal prison and a $250,000 fine.
Restitution could also be ordered. Sentencing is February 6.
Jackson, Mo.: Preparer Cynthia M. Raymond was sentenced to 51 months in federal prison for preparing false income tax returns, resulting in a total tax loss of more than $316,000.
Raymond pleaded guilty to five counts of filing false returns and one count of aggravated ID theft. In her plea, she admitted submitting some 98 false returns under the names of 36 clients for the tax years 2007 through 2010.
Her clients were unaware that she prepared returns that included false deductions for business losses, charitable contributions, unreimbursed business expenses, medical expenses and false credits, including education and residential energy credits.
She also provided her clients with different returns than she e-filed with the IRS and routinely directed the IRS to deposit part of the refund to her clients’ accounts and the rest of the refund into her personal account.
Geismar, La.: Preparer Maletica Ferguson, 37, has been sentenced to 10 months in federal prison after pleading guilty to defrauding taxpayers of $264,000 by filing false returns, according to published reports.
She was also reportedly sentenced to eight months in community confinement and a year of supervised release and ordered to pay restitution.
Ferguson's conviction stems from a fraudulent return scheme in which she submitted dozens of false returns in 2010 and 2011 by misrepresenting taxpayers’ incomes and claiming false credits, reports said.
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