Crime Watch: August 9, 2013

Real Estate Developer Convicted for Tax Evasion in Federal Court 
A former Washington State real estate developer and his long-time girlfriend were convicted August 4 in US District Court in Seattle on twenty-five counts of tax evasion and false statements related to their scheme to avoid paying taxes on more than $23 million in income. Winston Bontrager and Pauline Anderson were indicted in March 2012 and have been in federal custody since June 2012. The jury deliberated about three days following a four-week-long jury trial. Jurors convicted the two on all counts presented by prosecutors. US District Judge Richard A. Jones scheduled sentencing for November 22, 2013.
For Bontrager, it is a second conviction for tax crimes and a third federal criminal conviction. Bontrager was previously convicted in 1983 for bank fraud and in 1994 for defrauding the Oregon Public Employees Retirement System and the IRS of over $687,000. In 1994 he was sentenced to forty months in prison. Some of the convictions returned August 4 were for Bontrager's false statements surrounding his failure to pay more than $687,000 in restitution from his prior conviction.
During the trial, prosecutors detailed how Bontrager and Anderson filed false tax returns from 2004 through 2009, failing to report more than $23 million in income, and failing to pay more than $2.7 million in taxes. Over $10 million was moved into foreign bank accounts in Anderson's name, and virtually all of the couples' assets were put in Anderson's name in order to hide it from the IRS and those seeking to enforce Bontrager's restitution obligation and collect delinquent taxes.
At the same time the couple paid little in income taxes, they purchased a luxury condominium in Bellevue, Washington, and spent approximately $500,000 on an extensive remodel. They owned a $325,000 wine collection, a $1.2 million home in Southern California, a 6.7 carat diamond ring, and a Bentley worth $186,000. They spent over $3.4 million in credit card purchases, including for travel, cosmetic surgery, cosmetic dentistry, restaurants, clothing, and shoes.
Prosecutors told the jury the case was about "fraud, deceit, and evasion," and they urged jurors to "follow the money" to see how Bontrager and Anderson made millions of dollars but refused to pay a single dime for Bontrager's restitution obligation, delinquent taxes, or in income tax. Prosecutors described various development deals in Vancouver, Washington, where Bontrager made millions of dollars, in some instances defrauding business partners as well as the IRS.
The tax crimes of conviction are each punishable by between three to five years in prison, and the false statement convictions are also punishable by up to five years in prison. Bontrager was convicted of nine tax counts and eight counts of making false statements. Anderson was convicted of eleven tax counts.
Source: US Attorney's Office - Washington 
Justice Department Files Suit to Stop San Diego Man from Preparing Tax Returns
The Justice Department announced that the United States has filed a civil injunction suit against Michael I. Turner, of San Diego to stop him from preparing federal tax returns.
The government complaint, filed in the US District Court for the Southern District of California, alleges that Turner, who has prepared returns since at least 2004, has failed to sign or affix a Preparer Tax Identification Number (PTIN) to many of the returns he has prepared.
In addition and according to the government, Turner takes bogus deductions on his customers' returns in order to claim larger refunds for his customers. His customers then recommend Turner as a tax preparer to their friends, which helps Turner to expand his customer base and further increase his own profits.
Specifically, the government alleges that Turner claims inflated or fabricated deductions on the Schedule A of his customers' Form 1040 tax returns, claiming that his customers have large noncash charitable contributions and unreimbursed employee expenses. The complaint also alleges that when Turner's customers are audited, Turner has provided false documents to those customers in an attempt to assist them in substantiating charitable contributions and employee expenses that they did not incur. According to the complaint, however, Turner has instructed his customers not to identify him as their tax return preparer in communications with the IRS.
The government alleges that Turner continues to prepare tax returns. According to the complaint, Turner applied for a PTIN in 2010, and has prepared at least sixty-eight tax returns for the 2012 tax year using that PTIN.
The government seeks, among other things, that the court bar Turner from acting as a tax return preparer or assisting others in preparing or filing federal tax returns or other tax forms or documents. The government also requests that the court bar Turner from appearing as a representative on behalf of any person or entity before the IRS, and from owning, managing, controlling, working for or volunteering for a tax-return preparation business.
Source: US Department of Justice

You may like these other stories...

Federal judge tosses IRS lawsuitsBernie Becker of The Hill reported that a federal judge sided with the IRS on Thursday, tossing out two lawsuits filed against the tax agency over its improper scrutiny of Tea Party groups...
Amidst the dark clouds hovering over the IRS this year—ranging from the lingering Tea Party scandal to other improprieties to damaging budget cuts—at least there's a ray of sunshine in a new report from the...
SEC, Big Four Chinese affiliates make progress in talks over audit documentsMichael Rapoport of the Wall Street Journal reported that the US Securities and Exchange Commission (SEC) and the Chinese affiliates of the Big Four...

Already a member? log in here.

Upcoming CPE Webinars

Oct 30Many Excel users have a love-hate relationship with workbook links.
Nov 5Join CPA thought leader and peer reviewer Rob Cameron and learn ways to improve the outcome of your peer reviews while maximizing the value of your engagement workflow.
Nov 12This webcast presents basic principles of revenue recognition, including new ASU 2014-09 for the contract method. Also, CPAs in industries who want a refresher on revenue accounting standards will benefit.
Nov 18In this session Excel expert David Ringstrom, CPA tackles what to do when bad things happen to good spreadsheets.