Dec 27th 2013
Four Minneapolis-Based Return Preparers Indicted for Conspiracy, Aggravated Identity Theft, and Preparing False Returns
A sixty-three-count superseding indictment charging Chatonda Khofi, Ishmael Kosh, Amadou Sangaray, and Francis Saygbay in a conspiracy to defraud the IRS was unsealed December 23. The indictment alleges that Primetime Tax Services Inc. was a tax return preparation business with three storefronts in the Minneapolis area.
Khofi worked as the CEO of Primetime, and Kosh and Sangaray worked as managers of the Brooklyn Center location of Primetime. All four named defendants allegedly prepared false tax returns under the name of Primetime.
According to court documents, Khofi, Kosh, Sangaray, and Saygbay conspired amongst themselves and with others to prepare and file false individual income tax returns for the customers of Primetime. Some of these returns reported false dependents, false deductions, false Schedule C business losses, and false wage income. These false entries resulted in fraudulently inflated refunds for their customers. From 2007 to 2009, Primetime filed over 2,000 customer federal income tax returns with the IRS.
The indictment further charges each defendant with multiple counts of aggravated identity theft and multiple counts of aiding and assisting in the preparation of false individual income tax returns. The aggravated identity theft charges stem from the defendants' alleged use of the names and Social Security numbers of actual persons to falsely claim as dependents on their customers' individual income tax returns.
According to the indictment, the defendants also accompanied some customers to check-cashing businesses to cash their falsely inflated tax refund checks, then demanded a portion of the cashed refund check in addition to tax preparation fees already collected. The indictment alleges that, in some instances, the defendants withdrew cash from debits cards containing their customers' refunds without permission, again in addition to the tax preparation fees they had already collected.
If convicted, the defendants face a maximum potential sentence of five years in prison for the conspiracy count and three years in prison for each count of aiding in the preparation of a false tax return. The aggravated identity theft counts have a mandatory two-year sentence.
Federal Court Shuts Down Alabama Tax Preparer
A federal court in Montgomery, Alabama, permanently barred Kenya Hendrix Adams from preparing tax returns for others, the Justice Department announced December 24. The order also requires Adams to turn over to the United States copies of all returns or claims for refund that she prepared after January 1, 2008, and to notify each person for whom she prepared returns since that date. The order authorizes the United States to monitor Adams' compliance with the terms of the order.
The government's complaint alleged that Adams repeatedly prepared federal tax returns that understated her clients' federal tax liabilities. According to the complaint, Adams did so by falsely claiming or inflating tax credits or fabricating deductions. The suit alleges that the harm to the US Treasury as a result of her conduct could be in the millions of dollars.
Boca Raton Resident Sentenced for Filing False Tax Returns, Access Device Fraud, and Aggravated Identity Theft
Harvey Zitron of Boca Raton, Florida, was sentenced to eighty-one months in prison, to be followed by three years of supervised release. Zitron was previously convicted by a federal jury.
According to the indictment, Zitron was charged with filing fraudulent IRS United States Individual Income Tax Returns, for 2004 and 2005 and Amended Individual Income Tax Returns for 2003, 2004, and 2005, all in violation of Title 26, United States Code, Section 7206(1). In addition, he was charged with three counts of access device fraud and two counts of aggravated identity theft.
According to the evidence presented at trial, Zitron used companies to write checks to friends or acquaintances who cashed the checks and returned the cash to Zitron. Zitron then failed to declare this income on his tax returns. He also opened credit card accounts in the names of his son and ex-wife and charged more than $1,000 in a single year on those accounts without their authorization or knowledge.
Owner of New Jersey Debit Card Business Admits Filing False Tax Returns
Richard Jackowitz of Warwick, New York, pleaded guilty December 20 in Newark federal court to two counts charging him with filing false tax returns.
According to documents filed in this case and statements made in court, Jackowitz owned and operated Branded Marketing, a Haskell, New Jersey, company that sold debit cards. For the 2007 and 2008 tax years, Jackowitz had unreported income from his company of approximately $105,512 and $359, 677, respectively. Jackowitz's false tax returns caused a loss to the IRS of more than $300,000.
The tax charge to which Jackowitz pleaded is punishable by a maximum potential penalty of three years in prison and a $250,000 fine. As part of his plea agreement, Jackowitz also agreed to pay $319,940 in restitution to the government.
Long-Time Friends Admit Embezzling from Tax Consulting Business
Lamonica Phillips and Pamela Gail Willis, aka Pamela Gayle Knight, both of Dallas, appeared in court December 20, and each pleaded guilty to a federal felony offense stemming from their embezzlement of funds from Phillips' former employer.
Phillips and Willis each pleaded guilty to one count of conspiracy to commit mail fraud. Each faces a maximum statutory penalty of five years in prison, a $250,000 fine, and restitution.
In a related case, Audrey Starr of Oklahoma City is charged with one count of conspiracy to commit mail fraud and four substantive counts of mail fraud. If convicted, the conspiracy count carries a maximum statutory penalty of five years in federal prison and each of the substantive mail fraud counts carries a maximum statutory penalty of twenty years in prison. Each count also carries a maximum statutory penalty of $250,000.
According to documents filed in the case, Phillips and Willis devised and carried out a scheme to embezzle money from Phillips' employer, Industry Consulting Group (ICG). Starr allegedly became a conspirator in the scheme through knowingly receiving and using stolen funds.
ICG is a tax consulting business based in Dallas that focuses on tax valuation of properties and the maintenance of tax portfolios. As part of their business, ICG, on behalf of their clients, pays taxes on home mortgages and provides valuations of properties in order to contest tax appraisals.
As part of her duties, Phillips had access to ICG's financial software, could prepare checks on behalf of ICG, and was responsible for cashing and mailing checks to ICG's customers. Phillips began the scheme to defraud ICG in March 2012, following a conversation with her good friend, Willis.
Developer Sentenced to More than Twelve Years in Prison for Orchestrating Massive Mortgage Fraud Involving over $7 Million in Loss
Sirewl R. Cox of Boston was sentenced December 20 to 150 months in prison and three years of supervised release. On November 15, 2013, following a sixteen-day jury trial, Cox was convicted of wire fraud, bank fraud, and conducting an unlawful monetary transaction.
In 2006 and 2007, Cox identified multiple-family buildings for sale and recruited straw buyers to purchase the buildings. Cox and others then recruited straw buyers to purchase individual units in buildings that Cox controlled. The straw buyers' financing for the purchases was obtained by submitting mortgage loan applications and other documents that falsely represented key information, such as the buyers' income, employment, assets, and/or intention to reside in the condominiums. Deals were closed with HUD-1 settlement statements that falsely represented that straw buyers had made down payments and paid other funds in connection with the property transactions, and that falsely represented how the proceeds of the mortgage loans were disbursed.
Cox is the fourth defendant involved in this scheme to be sentenced. Three other defendants pleaded guilty and have been sentenced. In December 2012, Lord Allah was sentenced to eighteen months in prison. In January 2013, Rebecca Konsevick was sentenced to thirty months in prison while Latonya Burnett was sentenced to three years of probation.