Crime Watch: April 12, 2013
by Terri Eyden on
Justice Department Seeks to Shut Down Mo' Money Taxes and Its Owners
The United States has filed a civil injunction lawsuit seeking to shut down Mo' Money Taxes, a Memphis, Tennessee–based tax-preparation chain that at one time operated as many as 300 offices in eighteen states, the Justice Department announced April 10. The United States accuses Mo' Money Taxes and its owners, Markey Granberry and Derrick Robinson, and store manager Eumora Reese of creating and maintaining a business environment that encourages the preparation of fraudulent federal income tax returns.
The government suit alleges that the defendants promote a culture that favors volume and profits over accuracy and integrity and creates an environment where fraudulent return preparation and tax law violations flourish. According to the complaint, Mo' Money Taxes' managers, licensees, and employees prepare fraudulent returns that cause their customers to incorrectly report their federal tax liabilities and underpay their taxes, and they charge customers bogus and unconscionably high fees.
The complaint alleges that the defendants style themselves as savvy marketers and promoters of the Mo' Money Taxes brand and image – as evidenced by their commercials – and that Granberry and Robinson decided to change the business' name following bad publicity in 2012 surrounding customer allegations that Mo' Money Taxes failed to provide tax refunds to customers in a reasonable amount of time, if at all. According to the complaint, Granberry and Robinson now do business under the name Marquis Taxes and, along with Reese, under the name Southern King Taxes.
According to the complaint, the defendants encourage Mo' Money preparers to:
- Falsely claim the earned-income credit;
- Claim improper filing status;
- Claim bogus education credits;
- Improperly prepare returns using paystubs rather than employer-issued W-2 forms;
- Fabricate bogus W-2 forms;
- File tax returns without customers' consent;
- Sell false and deceptive loan products; and
- Charge deceptive and unconscionable fees.
The complaint cites alleged examples of Mo' Money Taxes customers whose returns had such fraudulent claims. The complaint also refers to several state government actions related to Mo' Money Taxes' sale of refund-anticipation loans and charging of undisclosed or improper fees.
The complaint alleges that the estimated tax loss from fraudulent tax return preparation at Mo' Money Taxes offices in Memphis, Atlanta, Richmond, and Jackson in 2011 exceeds $9 million.
The United States previously obtained a permanent injunction against Toney Fields and Trumekia Shaw, who operated a Mo' Money Taxes location in Nashville.
New Jersey Return Preparer Pleads Guilty to Corruptly Endeavoring to Obstruct the IRS and Preparing False Tax Return
On April 9, Eric Majette, a tax return preparer and owner and operator of the Berrisford Group, located in Somerville, New Jersey, pleaded guilty to corruptly endeavoring to obstruct and impede the Internal Revenue laws and to preparing a false tax return, the Justice Department and IRS announced.
On January 17, 2013, a federal grand jury sitting in Trenton, New Jersey, returned a superseding indictment, charging Eric Majette with twenty-nine counts of aiding and assisting in the preparation of false tax returns for clients and one count of corruptly endeavoring to obstruct and impede the Internal Revenue laws.
According to the superseding indictment, Majette prepared false tax returns for clients by inflating itemized deductions and credits, such as charitable contributions, unreimbursed employee expenses, and energy credits. In addition, when his clients were audited, Majette submitted false charitable contribution receipts to the IRS to support the fraudulent returns that he prepared. Sentencing has been scheduled for September 24, 2013.
Federal Court Shuts Down Louisiana Tax Return Preparer
A federal court in Baton Rouge, Louisiana, permanently barred Ann Williams and her tax preparation firm, Ann's Tax Service, from preparing federal tax returns for others, the Justice Department announced April 10. The civil injunction order, to which Williams and Ann's Tax Service agreed without admitting the allegations against them, was signed by Judge James J. Brady of the US District Court for the Middle District of Louisiana.
The government complaint alleged that Williams and her business had repeatedly prepared false federal income tax returns that understated customers' tax liabilities. According to the complaint, Williams inflated or fabricated business expenses, reported fictitious business income, and fraudulently claimed the earned-income credit on customers' tax returns. The government suit alleges that Williams' fraudulent practices may have resulted in as much as $2.2 million in lost tax revenue.
Former New Jersey Resident Convicted of Preparing False Tax Return
Ashraf Hassan-Gouda, a former resident of Mays Landing, New Jersey, pleaded guilty to one count of assisting in the preparation of a false federal individual income tax return, the Justice Department and IRS announced April 11. Hassan-Gouda was charged by a federal indictment returned on March 27, 2007.
According to court documents, during 2003, Hassan-Gouda was the owner of Tax World, a tax preparation business located in Atlantic City, New Jersey, and prepared the false tax return for a client at his business.
The matter had been scheduled for trial beginning May 6, 2013, before US District Court Chief Judge Jerome B. Simandle in Camden, New Jersey. Sentencing is scheduled for June 17, 2013. Hassan-Gouda faces a maximum potential sentence of three years imprisonment and a fine of up to $250,000.
Source: US Department of Justice
Long Beach Tax Return Preparer Charged with Aiding in Preparation of False Tax Returns
A federal grand jury returned a superseding indictment charging Rathana Ung, former director and officer of Lim's Income Tax, Inc. and Lim's Tax, Inc. in Long Beach, California, of aiding in the preparation of false federal income tax returns filed with the IRS April 10.
According to the superseding indictment, Ung filed thirty-nine false federal income tax returns, Forms 1040 with the IRS containing false deductions and false business losses. It is alleged that Ung knew that taxpayers for whom the returns were filed were not entitled to claim such deductions.
Ung is charged with filing false tax returns claiming false Schedule A and Form 2106 (Employee Business Expenses) deductions, false Form 8917 (Tuition and Fees Deduction), and False Schedule C (Profit or Loss from Business). The false tax returns generated refunds for the years 2006, 2007, 2008, and 2009 for which the taxpayers were not entitled.
Source: IRS Criminal Investigation, Los Angeles Field Office
San Dimas Man Pleads Guilty to Subscribing to a False Tax Return
Youngsoo Sharfu Lee, of San Dimas, California, pleaded guilty April 9 to one count of subscribing to a false federal income tax return, Form 1040, with the IRS before US District Judge Gary Allen Feess.
According to the filed plea agreement, Lee admitted that he falsely claimed a $7,500 credit on his 2008 federal tax return that he did not qualify to receive. Lee signed a US Individual Income Tax Return, Form 1040, for the calendar year 2008, knowing that the tax return was false and contained incorrect information that he was entitled to the First-Time Homebuyer Credit of $7,500 for acquiring a home qualifying for the credit in October 2008. Lee admitted that he knew that he was not a first-time homebuyer in 2008 and did not acquire a home qualifying for the credit in October 2008.
Lee was also previously indicted for making false statements to a financial institution. According to the indictment, in 2007, Lee made false statements in connection with loans for two properties in San Dimas, California, and Memphis, Tennessee. According to the indictment, Lee claimed each property would be his primary residence while he resided in a third property in Arcadia, California.
At sentencing, scheduled for July 15, 2013, Lee faces a maximum sentence of three years imprisonment, a one-year period of supervised release, and a fine of $100,000 or twice the gross gain or gross loss resulting from the crime.
Source: IRS Criminal Investigation, Los Angeles Field Office