Crime Watch: May 2, 2013

Federal Court in California Shuts Down Tax Preparer

A federal court in Los Angeles has entered an order permanently barring John Trunzo from preparing federal income tax returns and other tax-related documents for others, the Justice Department announced April 30. Trunzo, who operated under the business names "Your Taxman John Trunzo," "Your Taxman," and "YTJT" in Los Angeles County, consented to the civil injunction order, which was signed by US District Judge Michael W. Fitzgerald.
The government complaint, filed on February 14, 2013, alleged that Trunzo underreported gross receipts on his own income tax returns filed for the tax years 20052007, causing the government to incur a tax loss of $67,231 for those years. The complaint further alleged that Trunzo provided the IRS with false documents in order to convince auditors that his clients had incurred expenses that Trunzo knew they had not incurred and were entitled to deductions that Trunzo knew were fabricated, which obstructed and impeded the IRS from determining his clients' true tax liability.
In addition to barring Trunzo from preparing tax returns, Judge Fitzgerald also required Trunzo to create a website to inform his customers of the entry of the permanent injunction within thirty days.
As noted in the complaint, Trunzo was previously charged with one count of subscribing to a false income tax return. He entered a guilty plea to this charge. According to the plea agreement, filed in the criminal case on July 9, 2012, Trunzo agreed to enter into a binding civil injunction, barring him for life from aiding or assisting in the preparation of federal income tax returns for anyone other than himself and his legal spouse, and barring him from representing persons before the IRS.
Source: US Department of Justice
Alabama Resident Indicted in Stolen Identity Refund Fraud Scheme
Bridgette Rivers, a resident of Montgomery, Alabama, was indicted by a federal grand jury on charges of conspiracy and theft of government funds related to her participation in a scheme to use stolen identities to file fraudulent tax returns, the Justice Department and the IRS announced April 30.
According to the indictment, Rivers provided identity information to coconspirators, who then used the stolen identities, among other identities, to file false tax returns that fraudulently requested tax refunds from the IRS. Rivers is also alleged to have recruited another individual to provide her bank account information for use in the conspiracy. Fraudulently obtained tax refunds allegedly went into that individual's bank account, and the individual would then withdraw the money to give to Rivers.
If convicted, Rivers faces a maximum potential sentence of ten years in prison for the conspiracy charge and each theft of public funds charge. She would also be subject to fines, mandatory forfeiture, and restitution if convicted. 
Source: US Department of Justice
Alabama Woman Indicted for Cashing Fraudulently Obtained Tax Refund Checks
A federal grand jury returned an indictment charging Shatoubrioune Hare George, a.k.a. "Tobie," with conspiring to cash fraudulently obtained federal tax refund checks, the Justice Department and the IRS announced April 30. The six-count indictment charges George, of Montgomery, Alabama, with conspiracy to commit theft of public funds and with theft of public funds.
According to the indictment, George and others obtained federal tax refund checks issued by the IRS as a result of the filing of fraudulent tax returns. She and others cashed seventy-seven fraudulently obtained US Treasury tax refund checks totaling approximately $137,000 through a bank teller who worked for a bank in Wetumpka, Alabama.
If convicted, George faces a potential maximum of five years in prison for the conspiracy count and ten years in prison for each theft of public funds count. She is also subject to fines, mandatory restitution, and forfeiture if convicted. 
Source: US Department of Justice
New York Man Pleads Guilty in Massachusetts to Theft of Government Property and Money Laundering in Stolen Identity Refund Fraud Scheme
Odalis Castillo-Lopez, a citizen of the Dominican Republic and a resident of New York, pleaded guilty April 30 to theft of government property and money laundering in connection with a scheme to cash US Treasury tax refund checks fraudulently obtained using the stolen identities of Puerto Rican residents. The guilty plea was announced by the Justice Department, the IRS-CI, Homeland Security Investigations, and the US Secret Service.
At a hearing before US District Court Chief Judge Patti B. Saris in the District of Massachusetts, Castillo pleaded guilty to theft of government property and money laundering. According to the documents filed in this case, the criminal conduct involved the attempted negotiation of US Treasury income tax refund checks obtained in the name of stolen identities. Castillo faces a maximum potential sentence of ten years in prison and a fine of up to $250,000 for the theft of government property charge, and a maximum of twenty years in prison and a fine of up to $500,000 for the money laundering charge. Sentencing is scheduled for May 30, 2013.
Source: US Department of Justice
Owner of Multiple New York Construction Companies Indicted for Tax Fraud
Eric Anderson, of Dix Hills, New York, was arrested April 29 following his indictment on April 25, 2013, on numerous tax crimes, the Justice Department and IRS announced.
According to the indictment, Anderson owned three construction companies in Dix Hills: Anderson Framing, Anderson Enterprise, and Anderson Trim Specialty. As alleged, Anderson corruptly endeavored to obstruct the IRS between 2006 and 2008 by using a check-cashing service to cash over $10.5 million of gross receipts checks paid to his construction companies. He concealed his check-cashing activities from his tax return preparer so that the income was not included on the companies' tax returns. Anderson paid his employees in cash while failing to collect and pay over to the IRS employment taxes. He also diverted cash receipts earned by his companies for his own personal use. Finally, after learning of the criminal investigation, Anderson shredded business records and lied to IRS investigators about his use of the check-cashing service.
The indictment also alleges that Anderson filed a false 2006 corporate income tax return for Anderson Trim and failed to file multiple years of employment tax returns, corporate income tax returns, and individual income tax returns. Anderson faces a potential maximum sentence of ninety-four years in prison and a potential fine of up to $5,300,000.
Source: US Department of Justice
Inland Empire Return Preparer Pleads Guilty to Tax Fraud
The operator of a San Bernardino, California, tax preparation service pleaded guilty May 1 to charges that he failed to report income totaling almost $500 thousand dollars on his personal federal income tax returns.
Gerald Jerome Parker of Rancho Cucamonga, operator of GJP Tax Associates located in San Bernardino, pleaded guilty to one count of subscribing to a false income tax return.
According to the plea agreement, Parker failed to report income from his tax preparation business totaling $491,978 on his 2006, 2007, and 2008 personal income tax returns. 
The count to which Parker pleaded guilty relates to his 2006 tax return. Parker falsely stated that his business income was $9,333, when in fact he had income of $51,847. For the 2007 and 2008 tax years, Parker did not file a tax return, failing to report business income of $218,230 and $231,234, respectively
Parker further admitted that for the 2005, 2006, and 2007 tax years, he prepared twenty-three tax returns for clients which falsely inflated deductions for charitable gifts, business expenses, or "other" expenses generating falsely inflated tax refunds.
Per the plea agreement, Parker has agreed to the entry of a binding civil injunction, barring him for life from aiding in the preparation of federal income tax returns for anyone other than himself and his legal spouse and barring him from representing other individuals before the IRS. 
As a result of the guilty plea, Parker faces a statutory maximum sentence of three years in federal prison and a fine of $250,000 when he is sentenced on July 22, 2013, by US District Judge Gary A. Feess. Parker may be further ordered to pay approximately $138,055 in restitution.
Source: US Attorney's Office
California Man Who Participated in Tax Fraud and Identity Theft Scheme Sentenced to Almost Six Years in Federal Prison
A Montclair, Claifornia, man who was charged for his role in a scheme to unlawfully use the names and Social Security numbers of other people to file fraudulent federal income tax returns was sentenced April 29 to seventy months in federal prison.
Chibueze Chidozie Nwafor, who also used the name "Cheeze," was sentenced by US District Judge Otis D. Wright II, who also ordered the defendant to pay $118,474 in restitution to the IRS.
In late January, Nwafor pleaded guilty to three criminal counts  presenting false claims to the United States, theft of government benefits, and aggravated identity theft  the day his criminal trial was scheduled to begin.
According to the plea agreement, Nwafor used the identification of other individuals who he knew to be real people, specifically the names and Social Security numbers of purported tax filers, in order to submit false tax returns. Nwafor knew the information contained in the false tax returns that he filed contained materially false information, including taxes withheld and wages received from a bogus corporation, California Mutual Life and Health (CMLH). During this same time period, Nwafor misappropriated tax filer refunds to which he was not entitled for his own use.
In 2009, Nwafor prepared tax returns for various individuals, including a 2008 federal income tax return in the name of an unidentified victim claiming a tax refund of $7,773. Similar to other tax refunds filed by Nwafor, this federal income tax return included a Form W-2 that falsely claimed the unidentified victim received $30,119 in wages from CMLH. Subsequent to the filing of this fraudulent return, the IRS issued a tax refund, which Nwafor stole and converted to his own use.
For the 2010 tax year, Nwafor filed a fraudulent tax return on his own behalf claiming false deductions, which resulted in Nwafor receiving a check in the amount of $32,789 from the IRS.
The seventy-month sentence included a mandatory two-year term for the identity theft charge.
Source: US Attorney's Office
California Business Owner Pleads Guilty to Tax Fraud
Appearing before US District Judge Stephen V. Wilson, the owner of a residential and commercial paint business pleaded guilty April 29 to failing to report to the IRS wages paid to employees totaling over $1.5 million.
Scott G. Titus of Ojai, California – owner and operator of Scott Titus Painting – pleaded guilty to one count of subscribing to a false quarterly employment tax return in 2008.
According to the plea agreement, during the years 2008 through 2010, Titus owned and operated Scott Titus Painting. Titus painted residential and commercial properties and was paid by his clients per job. For the years in question, Titus failed to report $1,594,971 in wages paid to the employees of Scott Titus Painting on the quarterly and annual employment tax returns filed with the IRS, resulting in a tax loss to the government of at least $666,748.
The count to which Titus pleaded guilty relates to the employment tax return for the second quarter of 2008. Specifically, Titus reported paying wages to employees of $22,195, when, in fact, he paid wages of $215,774, falsely underreporting the wages paid by $193,579. 
Titus faces a statutory maximum sentence of three years in federal prison and a fine of $250,000 when sentenced. Judge Wilson ordered Titus to appear for sentencing on July 15, 2013.
Source: US Attorney's Office

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