California sisters get jail time in father/daughter tax fraud case

Two daughters of a Southern California man previously convicted of tax fraud have themselves been sentenced to six years in federal prison for their part in a $31 million scheme to defraud the Internal Revenue Service, the Department of Justice announced.

Karen Berry of San Bernardino and Carla Berry of Rialto were also ordered to pay $14 million in restitution to the IRS. They were sentenced Monday in U.S. District Court in Riverside after pleading guilty in 2008 to conspiracy to defraud the IRS, and aiding and assisting in the preparation of false tax returns, among other charges, the Justice Department reported.
Their father, Matthew Berry, who operated a tax business out of his Rialto home, was sentenced last June to nine years in federal prison and was ordered to pay more than $15 million to the IRS. He was convicted at trial of conspiring to defraud the IRS and filing false personal income tax returns for 2001, 2002, and 2004.
During the trial, the IRS showed evidence that it audited more than 4,500 false income tax returns prepared by Berry and his group, with an average tax loss of more than $3,150 each.
The Justice Department said that Berry named his tax business N.C.K. Services, Inc. in 2004 and moved it from his home to a commercial building in Rialto, where he and his daughters prepared fake tax returns, with inflated deductions for unreimbursed employee expenses, real state taxes, charitable contributions, mortgage interest (for clients who in some cases did not own homes), and other items.
The sisters, according to plea agreements, contended that their father controlled the cash paid by clients. Each return preparer was paid weekly, in cash, based upon the number of returns the preparer had completed in that time.
“The collective 21-year prison sentence for the Berry family serves as a reminder to all tax return preparers who intentionally prepare fraudulent tax returns – their disregard for our tax system can lead them to prison,” said Leslie P. DeMarco, Special Agent in Charge, IRS-Criminal Investigation, Los Angeles Field Office, in a statement.
Co-conspirators Ivan Johnson of San Bernardino and Valerie Dixon of Rialto previously pleaded guilty to similar charges and were sentenced late last year. Johnson was ordered to 35 months in federal prison and to pay $19,034,901 in restitution to the IRS. Dixon was sentenced to five years of probation, which includes 10 months of home detention, and to pay the same amount in restitution.

You may like these other stories...

Some of your clients may get away to business conventions from time to time. It gives them a chance to rub shoulders with colleagues, catch up on the latest developments, and fine-tune their skills. And, when the meetings or...
PwC must face $1 billion lawsuit over MF Global adviceA federal judge on Wednesday ordered PricewaterhouseCoopers (PwC) to face a $1 billion lawsuit claiming that its bad accounting advice was a substantial cause of the...
Being an accountant doesn't mean you're giving investment advice to clients. However, at tax time, accountants often have to deal with the results of any investment advice clients obtained during the year—the...

Already a member? log in here.

Upcoming CPE Webinars

Sep 9
In this session we'll discuss the types of technologies and their uses in a small accounting firm office.
Sep 10
Transfer your knowledge and experience to prepare your team for the challenges and opportunities of an accounting career.
Sep 11
This webcast will include discussions of commonly-applicable Clarified Auditing Standards for audits of non-public, non-governmental entities.
Sep 24
In this jam-packed presentation Excel expert David Ringstrom, CPA will give you a crash-course in creating spreadsheet-based dashboards. A dashboard condenses large amounts of data into a compact space, yet enables the end user to easily drill down into details when warranted.