Some of our favorite recent tax fraud cases (and names).
Tallulah, La.: Preparer Chetoria Tyler faces more than 30 felony counts related to a $60,000 tax fraud scheme.
Investigators say Tyler submitted fraudulent income tax returns on behalf of clients of her tax prep business, TC Enterprises. She is charged with filing 2012 and 2013 Louisiana individual income tax returns containing false claims for state child care tax credits. Ten of her clients told investigators they had no dependents and did not provide Tyler with information claiming they did. The phony claims resulted in $61,447 in fraudulent refunds.
Tyler is also charged with failing to report income she earned from her tax prep and with inflating the withholding data on her own state individual income tax return. The Department of Revenue blocked $1,767 in fraudulent refunds that Tyler would have received due to the inflated withholding.
She was booked on 15 counts of computer fraud, 15 counts of filing or maintaining false public records, and two counts of criminal penalty for evasion of tax.
Sicklerville, N.J.: Preparer Atticus Rice, 51, has been charged with aiding in the preparing and filing of materially false returns.
Rice, a preparer at Quick Taxes and Payroll Services in Philadelphia, allegedly prepared false returns for a number of individuals between 2008 and 2013 by reporting false income, expenses and credits, resulting in tax losses of approximately $162,217.
If convicted, Rice faces a maximum of 15 years in prison, restitution to the IRS and a $500 special assessment.
Casa Grande, Ariz.: Preparer Haydee Guerra Neff has been sentenced to 18 months in prison followed by three years of supervised release. Neff was also ordered to pay $435,280 in restitution to the U.S. Treasury. In June, Neff pleaded guilty to two counts of filing false, fictitious and fraudulent claims.
Neff filed false returns with the IRS for the tax years 2010 and 2011. Neff admitted to preparing correct or substantially correct returns using information provided by each client and later changing the return without the client’s knowledge or consent. The client was then provided with the correct or substantially correct return but Neff would file returns that contained false expenses and requests for inflated refunds.
According to her plea agreement, Neff submitted at least 26 false returns, which resulted in approximately $137,009 in additional refunds which were then diverted all or in part to bank accounts under her control. The IRS identified 90 additional returns prepared by Neff that resulted in up to $298,271 in additional false claims.
Exmore, Va.: Sherry R. Kelley, 41, pleaded guilty to engaging in aggravated ID theft.
A Norfolk federal grand jury indicted Kelley in June on 10 counts of aggravated ID theft and 10 counts of using others’ Social Security numbers. As a result of her guilty plea to the first count of the indictment, Kelley faces a mandatory penalty of two years of incarceration when she is sentenced on January 20.
According to case documents, Kelley previously owned and operated four H&R Block franchise stores in Virginia. While overseeing the operation of these stores, Kelley gained access to and misused the identity information of approximately 20 tax clients.
Unbeknownst to her clients or H&R Block, Kelley electronically applied for and obtained lines of credit from H&R Block Bank in her clients’ names and forged her clients’ signatures to account paperwork. Then, using debit cards issued with the approved credit lines, Kelley made thousands of dollars in purchases and ATM cash withdrawals against the fraudulently obtained accounts before later repaying the sums taken.
Longmeadow, Mass.: Preparer Jonathan Fein, 55, has been sentenced to six months in prison, six months in jail and six months in home confinement for filing false returns for clients of his business, JLF Tax Group Inc.
The court also ordered Fein to repay $138,474 to the IRS and $29,000 to the Massachusetts Department of Revenue. Fein is also permanently enjoined from preparing tax returns. In December 2012, Fein pleaded guilty to 29 counts of falsely preparing returns.
Fein operated JLF, d/b/a American Tax or American Tax Service in Springfield and Greenfield, Mass. Fein prepared individual federal returns for various JLF clients. Between January 2007 and April 2012, Fein prepared numerous returns that he knew were fraudulent so his customers could receive larger refunds from the IRS.
Fein generally deducted his preparation fee from the fraudulently obtained refunds. In November 2010, he falsely stated to federal agents that he did not fraudulently prepare any returns to conceal his fraud.
Miami: Claude Arthur Verbal II, formerly of Raleigh, N.C., has been sentenced to 135 months in prison for tax fraud, health care fraud and money laundering in two separate cases.
Verbal was also ordered to serve three years of supervised release following his prison term, to pay restitution of $4,078,584 to the IRS and $2,382,378 to the North Carolina Department of Health and Human Services.
On April 9, Verbal pleaded guilty to one count of conspiracy to defraud the U.S., one count of aiding and assisting the preparation of false returns, one count of health care fraud and one count of money laundering.
Verbal was the owner of Nothing But Taxes, a prep franchise with 10 branches throughout North Carolina from 2005 to at least 2012. He personally prepared false returns for clients of NBT and taught and encouraged his employees to do so as well.
Verbal and NBT employees frequently offered clients a dramatically larger refund if the client agreed to make a cash payment to their preparer. These payments were over and above the flat fee that NBT charged every client whether or not the return was falsified. The most common falsifications at NBT involved dependents, Schedule C businesses, tip income, EITCs and education credits. Verbal and many of his employees facilitated the purchase and sale of false dependents at NBT by purchasing the names, dates of birth and Social Security numbers of individuals to use as false dependents on other clients’ returns.
In November 2010, one of Verbal’s employees informed a U.S. probation officer of the fraudulent practices at NBT. The probation officer informed Verbal of this fraud and he denied knowledge of it, then took steps to keep the practice open and distance himself from the fraud.
According to court documents, Verbal also owned Infinite Wellness Concepts, a Medicaid behavioral health provider contracted to provide group therapy, intensive in-home services and enhanced mental health and substance abuse services. Authorities claimed Verbal acquired at least $1 million in fraudulently obtained funds from the Medicaid program.
Verbal used the schemes’ take to buy luxury cars, homes and jewelry. The money-laundering charge relates to the purchase of a $52,000 diamond ring with proceeds of health care fraud.
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