Crime Watch: December 19, 2012
Chiropractor Charged in Scheme to Extinguish Debt and to Obtain Fraudulent Tax Refunds
A federal grand jury in Trenton, New Jersey, returned an indictment charging David Moleski – a former New Jersey chiropractor – with fourteen counts of mail fraud, one count of wire fraud, one count of corruptly impeding the due administration of the Internal Revenue laws, and three counts of filing false claims for tax refunds, the Justice Department and the IRS announced December 13.
According to the indictment, Moleski attempted to extinguish both public and private debts by mailing to creditors fake financial instruments, entitled "secured promissory notes," that purported to draw against nonexistent accounts at the US Department of the Treasury. In addition, Moleski submitted three false tax returns with the IRS, in which he claimed tax refunds of approximately $1.2 million to which he was not entitled.
If convicted on all counts, Moleski faces a maximum potential sentence of 318 years in prison.
Woman Convicted of Filing False Claims for Tax Refunds Totaling More than $2.2 Million
April J. Rampton, forty-one, formerly of Heber City, Utah, was convicted December 17 in US District Court in Salt Lake City of nine counts of filing false claims for income tax refunds, the Justice Department and IRS announced.
Rampton, who was indicted on September 14, 2011, was released following the verdict. She is scheduled to be sentenced before US District Judge Dee Benson on February 27, 2013. The jury was unable to reach a verdict on six similar counts.
According to the indictment and proof at trial, Rampton prepared at least nine false claims for tax refunds on behalf of others. The total amount of false tax refunds claimed for the counts of conviction was more than $2.2 million.
The evidence at trial further established that Rampton used false IRS Forms 1099-OID with fictitious amounts of income and withholdings as the basis for the false claims for tax refunds.
For each false claim conviction, Rampton faces a maximum potential sentence of five years in prison and a fine of up to $250,000, or twice the gross gain or loss caused by the offense.
Las Vegas Attorney Sentenced for Tax Fraud
Ian Christopherson, an attorney and resident of Las Vegas, was sentenced December 17 to thirty-three months in prison and ordered to pay $728,786 in restitution by US District Judge Miranda M. Du, the Justice Department and IRS announced. On September 23, 2011, following a five-day trial in Las Vegas, Christopherson was convicted of two counts of income tax evasion for his federal individual income taxes and for federal employment taxes.
According to the evidence presented at trial, from 1994 through 1998, Christopherson ran a small law firm that employed up to nine individuals. He withheld taxes from each of his employees during these years but did not timely file employment tax returns or his own individual income tax returns.
In December 1998, the defendant filed more than thirty delinquent tax returns without making a single payment, even though each of the tax returns he filed reported that he owed taxes. According to the individual income tax returns and employment tax returns that Christopherson filed, he owed the federal government a total of $175,685 in federal taxes. The total tax loss, including penalties and interest, is $728,786.
Additionally, the evidence at trial showed that Christopherson spent the next five years engaged in stalling and diversionary tactics with the IRS. The defendant serially submitted incomplete offers in compromise (OIC) for consideration, only to withdraw them later. He failed to disclose significant assets in the OIC, including up to $250,000. He also misrepresented his efforts to file other back tax returns as required by the IRS.
The evidence at trial further showed that in August 2002, Christopherson set up a nominee account in the state of Montana in order to conceal his assets from further collection efforts by the IRS. Christopherson made use of a bank account under the name of Industrial Consultants, a company owned by friends of his, which was opened solely for the purpose of assisting Christopherson in evading his taxes. Over the next five years, Christopherson used this nominee account as his own – depositing checks from clients, transferring money from his client trust account, and writing checks for personal and business expenses.
SOURCE: US Department of Justice
Accountant Sentenced to Thirty-Eight Months in Prison for Embezzling $440,000 from Client
Jon Harvey Deal, age fifty-four, of Montgomery, Alabama, was sentenced to thirty-eight months imprisonment for having embezzled approximately $440,000 in client funds, US Attorney George L. Beck, Jr. announced on December 19.
According to court records, Deal was a certified public accountant and an investment advisor registered with the US Securities and Exchange Commission. Deal managed the finances of a Montgomery woman in her mid-80s (Client), who held substantial assets in an account at Charles Schwab & Co., Inc. Deal was an authorized signatory on the Schwab account and had access to checks that could be written against funds in the account.
From in or about October 2008 through in or about October 2011, unbeknownst to Client, Deal embezzled funds from the Schwab account of approximately $440,000, which he accomplished by writing checks against the account. Deal used the proceeds to pay personal expenses and to pay the expenses of a restaurant business in which he had an interest. The Client has been reimbursed for the loss.
Deal is to report to prison January 28, 2013.
SOURCE: US Attorney's Office Middle District of Alabama
Voice of the Editor
What would you do if one of your clients won the lottery? We asked several accountants to weigh in with their advice for the lucky Powerball winner, and the tips we received are useful for anyone who receives a windfall, whether it's a lottery win, an inheritance, a big bonus on the job, or a killing in the stock market.
This Week on AccountingWEB
CPAs Mira Finé, Scott Hitchcock, Rob Keasal, Kathy Scorcio, and Ken Travis offer ten pieces of financial advice for the newest Powerball winner.
Hang Bower of BDO USA and Dan Black of Ernst & Young share their perspectives on why their firms made the Best Places to Work for Recent Grads 2013 list.
Herbein + Company, Inc. firm members talked with AccountingWEB about their year-round employee wellness program.
Bill Walter of Gross, Mendelsohn & Associates and Harold Gaar of TravisWolff LLP weigh in on mobile technology use while employees are at work.