Crime Watch: August 14, 2013

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Tax Preparer Pleads Guilty in Manhattan Federal Court to Tax Fraud Scheme Involving over $7 Million in Bogus Deductions

The US Attorney for the Southern District of New York announced that Mark Goldberg, a Bronx-based tax preparer, pled guilty August 13 in Manhattan federal court to charges related to his participation in a scheme to file fraudulent tax returns on behalf of numerous clients, falsely claiming more than $7 million in bogus deductions, including school tuition credits and expenses. 

According to the indictment, statements made during the plea proceedings and other documents filed in Manhattan federal court, Goldberg ran a tax preparation and multiservice business named E&M Multi-Services, Inc. (E&M) out of a storefront building in the Bronx. Through that business, he prepared and oversaw the preparation of hundreds of federal and New York State tax returns that claimed false deductions, expenses, and credits, including tuition credits and expenses, unreimbursed employee business expenses, medical and dental expenses, charitable gifts, and earned income tax credits. 

Between 2005 and 2012, Goldberg caused the preparation and filing of tax returns for his clients that included over $7,000,000 of fabricated and fraudulently inflated deductions, resulting in the payment of refunds to which his clients were not lawfully entitled.

Goldberg pled guilty to one count of subscribing to a false and fraudulent tax return for himself, one count of aiding and assisting in the preparation of a false tax return for a relative, and one count of wire fraud. He faces a maximum sentence of twenty-six years in prison and is scheduled to be sentenced by Chief Judge Preska on December 17, 2013. In addition, Goldberg agreed as part of his guilty plea not to contest the forfeiture by the IRS of over $500,000 in an account maintained by Goldberg in the name of E&M, representing the fees generated by Goldberg as part of his tax fraud scheme. 

Source: US Attorney's Office - Southern District of New York


North Carolina Tax Preparer Sentenced to Federal Prison

US Attorney Thomas G. Walker announced August 6 that Tracie Jones Mathis of Goldsboro, North Carolina, was sentenced to fifty-seven months imprisonment, followed by three years of supervised release. Additionally, she was ordered to pay $1,094,742.00 in restitution joint and severally with Evelyn Gomez-Allen.

Mathis was named in a criminal information filed on September 20, 2012, charging her with conspiring to defraud the United States with respect to claims, in violation of Title 18, United States Code, Section 286. On January 16, 2013, Mathis pled guilty to that charge. 

According to the investigation, Mathis and her coconspirators agreed to defraud the United States by engaging in a scheme to obtain the payment of fraudulent claims through the filing of materially false income tax forms. Particularly, Mathis and her coconspirators engaged in the fraudulent manufacturing of W-2 forms and identification documents to serve as supporting documentation for fraudulent 1040 forms.

Source: US Attorney's Office - North Carolina


Alabama State Employee Sentenced to Prison for Stolen Identity Refund Fraud

Chequlia Motley of Montgomery, Alabama, was sentenced August 13, 2013, to serve thirty-six months in prison for conspiracy and aggravated identity theft, the Justice Department's Tax Division and the US Attorney for the Middle District of Alabama announced. Motley pleaded guilty to those charges in May 2013.

According to Motley's plea agreement, she was a former state employee who stole identities from state databases and sold them to coconspirators. As evidence presented at the sentencing hearing showed, Motley had previously worked for the Alabama State Employees' Insurance Board and stole the personal information of over a hundred state workers and their family members from the databases maintained by the board. She provided this information to Veronica Temple, Yolanda Moses, and Barbara Murry, who used the stolen identities to file false tax returns that fraudulently requested tax refunds from the IRS. Temple, Moses, and Murry were previously convicted and each sentenced in February to fifty-seven months in prison.

In addition to the prison sentence, Motley was ordered to pay $179,946 in restitution to the IRS.

Source: US Department of Justice


Kentucky Resident Charged with Tax Evasion and Other Tax Fraud Charges

The Justice Department's Tax Division and the US Attorney for the Eastern District of Kentucky, jointly announced August 14, 2013, that James S. Faller II, of Russell Springs, Kentucky, was indicted by a federal grand jury in Bowling Green. Faller, a consultant and private investigator, is charged in an eleven-count indictment with obstructing the internal revenue laws, evading his individual income taxes, making and subscribing to a false form that he filed with the IRS, and failing to file his individual income tax returns.

The indictment alleges that Faller obstructed the IRS' ability to collect payment of a substantial penalty he owed to the government and the IRS' ability to identify his income from 2006 through 2009. According to the indictment, Faller evaded the payment of a $216,000 penalty related to unpaid employment taxes of Call Center Communications Inc., of which Faller was the president. In addition, Faller was charged with evading his individual income taxes from 2006 through 2009. He allegedly failed to report more than $960,000 of income during this four-year period and committed various affirmative acts of evasion.

Faller faces a maximum punishment of three years in prison for the charge of obstructing the internal revenue laws, five years for each count of evading his individual income taxes, three years for making and subscribing to a false form that he filed with the IRS, and one year for each count of failing to file his individual income tax returns. He faces a maximum fine of $100,000 on each count of failing to file his income tax returns and $250,000 for each of the other counts. 

Source: US Department of Justice


Former Owner of Liquor Store Pleads Guilty to Tax Crime and Selling Cutting Agents to Local Drug Dealers

Southfield, Michigan, resident Bashar Saroki pleaded guilty to filing a false tax return and selling drug paraphernalia, the Justice Department and the IRS announced August 13.

According to court documents, Saroki controlled and operated Golden Star Party Store, a liquor store that was located in Detroit. From 2007 through 2011, Saroki sold more than $1 million worth of a variety of cutting agents to local narcotics dealers out of Golden Star Party Store and from his residence. The cutting agents were substances used by narcotics dealers to dilute the potency and increase the quantity of the narcotics sold to customers. Despite the significant proceeds from the sale of cutting agents, Saroki reported very little income on his false tax return for 2009.

Saroki faces a maximum sentence of three years in prison, one year of supervised release, and a $250,000 fine on each count. US District Judge Robert H. Cleland set sentencing for December 17, 2013.

Source: US Department of Justice


Former Georgia Tax Return Preparers Sentenced for Tax Fraud

The Justice Department and the IRS announced that former professional tax return preparers Greene Wylie Sheppard, Sabrina Johnson-Lavant, and Chandra Henderson were sentenced in August to serve fifty-six months, eighteen months, and eight months in prison, respectively, for conspiring to defraud the United States by filing false tax returns in order to receive fraudulently inflated refunds for their clients. In addition to conspiracy, Sheppard was also sentenced for aggravated identity theft. Sheppard was sentenced on July 11, 2013, and Johnson-Lavant and Henderson were sentenced August 9.

According to court documents, Sheppard owned and operated Quick Tax, a tax preparation business in Cordele, Ga. He conspired with his employees Johnson-Lavant and Henderson to obtain higher refunds on clients' returns by falsely inflating clients' wages in order to exploit certain tax credits. The co-conspirators sold other people's identifying information to their clients, and these other identities would then be claimed as dependents on their tax returns in order to manipulate the size of the refund. The three return preparers acquired dozens of identities by purchasing them. They maintained notebooks that kept track of the identities and how much clients owed them for the false dependents. Over the course of the conspiracy, which spanned four years, Quick Tax claimed over $400,000 in fraudulent refunds.

Source: US Department of Justice


Owner of New York Construction Company Indicted for Tax Fraud

The Justice Department and IRS announced that Tomas Olazabal, of Fresh Meadows, New York, was arrested August 9 following his indictment in the US District Court for the Eastern District of New York on August 8 on multiple tax crimes.

According to the indictment, Olazabal owned Tupac Construction Corporation, a construction company in Fresh Meadows. As alleged in the indictment, Olazabal used check cashing services to cash a substantial number of checks paid to his construction company for services between 2007 and 2008. He concealed his check cashing activities from his tax return preparers. Accordingly, the gross receipts represented by the checks negotiated at the check cashers were not included as gross receipts on the company's tax returns.

The indictment alleges that Olazabal filed false 2007 and 2008 corporate income tax returns for Tupac. Olazabal faces a potential maximum sentence of six years in prison and a potential fine of up to $500,000. A trial date has not been scheduled. 

Source: US Department of Justice



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