Tax Fraud Blotter: Weekend Incarceration

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Cloud prep, phony name; sending the money out; Bay State bilked of $1.38 million; and other highlights of recent tax cases.

LaPlace, La.: Preparer Shawanda Nevers, 49, has pleaded guilty to four counts of preparing fraudulent returns.

According to court documents, Nevers, a.k.a. Shawanda Hawkins, Shawanda Bryant and Shawanda Johnson, operated a series of businesses in the LaPlace area, including 3LJ’s Café Services & Sports Bar and 3LJ’s Industrial Service Solutions. Between 2011 and 2016, she filed on behalf of her clients income tax returns that included fake business losses, deductions and tax credits, and sought refunds to which her clients were not entitled.

Despite a 2014 federal permanent ban on her from preparing federal returns, Nevers continued to file fraudulent returns.

As part of the plea, she admitted that she owes the IRS $6,934,764 in restitution, as well as $128,900 to the Deepwater Horizon Oil Spill Trust and $964 to the Social Security Administration.

Sentencing is Nov. 15. Nevers faces a maximum of three years in prison on each count, as well as a period of supervised release, restitution and monetary penalties.

Topeka, Kan.: Preparer Maurice L. Stewart, 39, has pleaded guilty to 13 counts of filing false returns, causing a tax loss of $93,402.

Stewart filed returns in clients’ names, falsely claiming the returns were self-prepared. He also fraudulently reported that clients had suffered business losses.

He e-filed returns using the IP address of a Topeka business where he formerly was employed as an online IT technical services coordinator, and he prepared returns using an online program where he had opened an account using another person’s name.

Sentencing is Oct. 30. The parties have agreed to recommend a sentence of two years in federal prison and full restitution.

Phoenix: Former preparer Paula Anthony, 65, has been sentenced to 36 months in prison for her role in a stolen ID and money-laundering scheme.

Anthony was a key participant in stealing the IDs of dozens of taxpayers and filing fabricated income tax returns to obtain hundreds of thousands of dollars in refunds in the victims’ names. Anthony and others obtained the fraudulent refunds through online accounts set up with prepaid debit cards and used multiple bank accounts to convert the refund money into cash. Once Anthony obtained the cash, she or people she recruited laundered the money by wiring most of the funds to Nigeria.

Anthony was found guilty on multiple counts, including conspiracy, mail fraud, and aggravated ID theft.

Nashville, Tenn.: Preparer Robert J. Spears, 35, has pleaded guilty to one count of preparing a false return for his client and one count of filing his own false return.

According to court documents, Spears worked as a salesperson and manager at a call center and from 2010 through 2012 prepared and filed materially false returns for his coworkers, claiming bogus education credits, student-loan interest deductions and childcare expenses.

Without his clients’ knowledge, he diverted a substantial portion of the refunds issued in his clients’ names to bank accounts under his control. Spears did not report the diversions on his own personal income tax returns, nor did he include any of the money he earned preparing returns on his own tax returns.

In total, Spears caused a tax loss of more than $180,000.

Spears will be sentenced on Dec. 13, when he faces a maximum of three years in prison on each false return count, as well as a period of supervised release, restitution, and monetary penalties.

Storm Lake, Iowa: Toui Lo, 56, who formerly operated her own prep business and prepared and filed fraudulent federal returns, has been sentenced to four years of probation and ordered to pay a fine and restitution.

Lo, who pleaded guilty in April to one count of aiding and assisting the preparation and filing of a false and fraudulent return, admitted that she prepared and filed a false return for a client, fraudulently increasing the amount of the client’s refund by falsely claiming business expenses and various itemized deductions.

She also admitted that she filed multiple other similarly false returns between 2009 and 2013, resulting in more than $60,000 in undeserved refunds for her clients.

Lo’s fine was $3,000. A special assessment of $100 was imposed and she was also ordered to pay $61,137 in restitution to the IRS.

Gloucester, Mass.: Preparer John Carr Jr., 69, owner of the payroll and employer return prep service Boston Business Services, has been sentenced to 52 weeks of weekend incarceration for failing to pay more than $1.38 million in state withholding taxes and filing false Massachusetts returns on behalf of clients.

Carr, who pleaded guilty in May, prepared payroll checks or direct deposits for clients that included local businesses, government entities and nonprofits. He withheld federal and state income taxes, Social Security taxes and unemployment insurance taxes from his clients’ checks and deposits. Carr then impounded these tax payments from his clients’ accounts and forwarded them to the various taxing authorities, along with the applicable tax returns.

Authorities began investigating Carr in January 2016 and found that between 2010 and 2014 he impounded tax payments from his clients but failed to pay the state $1.38 million in withholding taxes. He also filed false tax returns with Massachusetts that understated the amount of income tax withholding which the clients owed.

Carr was also sentenced to three years of probation and was ordered to pay $18,000 in restitution.

Sheboygan, Wis.: Preparer Lesley E. Anzures, 35, has been sentenced to two years in prison to be followed by a year of supervised release after pleading guilty in January to assisting in the preparation and filing of a false federal income tax return.

According to court documents, around tax day in 2011 Anzures, who operated Lesley’s Tax Service, e-filed a return she had prepared for a client. The return listed six dependents and called for additional Child Tax Credit for them, although five of the six lived in Mexico.

This return represented that the client was entitled to deductions totaling $25,550 and claimed a refund of $3,772, even though Anzures knew the total deductions the client was entitled to were $7,300 for exemptions, $1,000 for a Child Tax Credit and $400 for a Making Work Pay Credit. A correct return would have showed that the client owed $1,156 in federal tax.

Other public court documents indicated that an IRS review of returns that Anzures prepared and filed for her customers for 2010 through 2013 claimed false funds of approximately $500,000.

Anzures was also ordered to pay $496,533 in restitution to the IRS.

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Tax preparation Tax fraud Tax-related court cases Tax scams Tax crimes Tax-related ID theft Money laundering