Invest until it hurts; learning the tab at sentencing; foreclosure fraud; and other highlights of recent tax cases.
Winnemucca, Nev.: Preparer Thomas Michael Bidegary, 67, a former IRS employee who co-owned Winnemucca Tax and Bookkeeping Service, has been sentenced to a total of five years in prison and three years of supervised release for his role in a return conspiracy.
Bidegary, who previously pleaded guilty to conspiracy to commit tax fraud and theft of government money, conspired with a co-defendant to prepare and file fraudulent individual income tax returns on behalf of clients.
Beginning in at least 2009 and continuing through December 2014, he advised clients that by making small “investments” into various businesses he owned, the clients could decrease their annual taxable income and increase their refunds. As part of the scheme, after receiving checks from clients, Bidegary prepared false tax forms for the corresponding tax year that included large fictitious business losses to reduce the client’s taxable income and inflate the refund.
He caused a tax loss of some $259,880.
In a separate criminal case filed against Bidegary, he prepared and filed an unauthorized return on behalf of an elderly woman in Battle Mountain, Nev. After receiving the $12,500 refund, he deposited the check into a bank account which was then converted for his personal use.
Marathon, Fla.: Preparer Pedro C. Rodriguez, 51, has pleaded guilty to two counts of filing fraudulent federal returns.
According to court documents, Rodriguez owned and operated the JC Mar Tax Services prep business and from approximately 2007 through 2017 filed fraudulent returns for his clients seeking undeserved refunds.
The returns reported fictitious itemized deductions and fraudulent education and residential energy credits. For each of the years 2013 through 2017, Rodriguez submitted 1,900 to 2,200 returns on behalf of his clients, causing multi-million-dollar losses to the IRS. A final calculation of the loss amount will be made at sentencing, on April 1.
Rodriguez faces a maximum of three years in prison on each false return count, as well as a period of supervised release, restitution and monetary penalties.
Los Angeles: Local resident Bridgette Charmine Potts, 52, has pleaded guilty to one count of wire fraud in connection with a scheme to defraud the IRS of more than $150,000 through the submission of fraudulent income tax returns.
According to the plea agreement, between 2014 and 2016 Potts submitted fraudulent returns using the personal ID information of 63 individuals, none of whom consented to this scheme. Potts also had the IRS wire the refunds to bank accounts that she controlled.
The total amount of loss to the IRS resulting from Pott’s scheme was some $159,377. She faces a maximum sentence of 20 years in prison when sentenced on April 15. Potts may also be ordered to pay $159,377 in restitution to the IRS.
Vallejo, Calif.: A federal jury has convicted Marty Marciano Boone, 57, and Ronda Boone, 56, of conspiring to launder $2 million that they received after filing fraudulent returns.
Marty Boone was found guilty of one count of filing a false tax return, one count of conspiring to commit money laundering and two counts of money laundering. Ronda Boone was found guilty of one count of conspiring to commit money laundering and two counts of money laundering.
According to court documents and evidence, the couple filed separate 2008 tax returns, each of which fraudulently claimed millions of dollars in refunds. The IRS flagged Ronda Boone’s return, did not pay her and fined her $5,000.
Marty Boone received a fraudulent refund of more than $1.9 million. Evidence showed that the Boones received this check in August 2009, deposited it in a new checking account and then quickly drained the account. They moved the funds through a series of other accounts in New York, California, Washington and the nation of Cyprus. The Boones also funneled more than $200,000 of this money to a “church” they set up in Washington state.
Evidence established that this money was spent at a Harley Davidson motorcycle shop, in nail salons and on other expenses such as groceries and gas. The Boones laundered another $100,000 of their fraud money through a shell company they established in Cyprus.
Sentencing is May 9. Both face a maximum of 10 years in prison and a fine equal to $250,000, or twice the amount of the criminally derived property, whichever is greater.
Sioux Falls, S.D.: Preparer Jacques Eviglo, 37, d.b.a. Global Income Tax Services, has been convicted of 25 counts of false claims and five counts of wire fraud.
He was sentenced to 60 months in prison for the first 25 counts, and 108 months in federal prison for the rest, all to be served concurrently, followed by two years of supervised release, restitution of $2,543,286.41 and a special assessment of $3,000.
The conviction stemmed from incidents between February 2015 and March 2017, when Eviglo prepared and e-filed federal income tax returns for clients. Eviglo claimed large, false itemized deductions on hundreds of those returns to inflate refunds. The clients did not provide Eviglo with the false information he submitted to the government.
He then used a third party as an intermediary to receive and disburse his clients’ federal refund payments, instead of having the payments directly deposited into his clients’ bank accounts. Eviglo skimmed additional “fees” from those refund payments without the clients’ knowledge and kept the skimmed portion for himself.
The total amount Eviglo skimmed exceeded $800,000 over four years.
Lynnfield, Mass.: Karyn M. Ingram, 51, has been sentenced for filing false returns on which she claimed, among other things, more than $370,000 in mortgage interest deductions even though the loan was in default and the property had gone into foreclosure.
She was sentenced to three years of probation, the first six months to be served in community confinement, and was ordered to pay $177,852 in restitution. In August, Ingram pleaded guilty to three counts of filing false returns for tax years 2011, 2012 and 2013.
Ingram filed returns in which she reported false and inflated Schedule A deductions and, in one year, a Schedule C business loss to reduce her overall tax liability. For tax years 2010 and 2011, she filed returns claiming mortgage interest deductions of $45,072 and $371,427 but she had not made any mortgage payments since 2008; in fact, the loan had defaulted and the property had gone into foreclosure. She also claimed real estate tax deductions in those same tax years, when in reality the real estate taxes had been paid by the mortgage lender and not by Ingram.
Ingram fraudulently reduced her tax liability more than $126,000.
Kansas City, Kans.: Preparer Shermaine C. Canady, 44, has been sentenced to six months in custody and six months in home confinement for preparing returns containing false information.
Canady pleaded guilty to one count of filing false income tax returns. In her plea, she agreed to pay $158,167 in restitution to the government.
She admitted that in one instance she prepared a return for a client containing false information in order to claim a $5,187 Earned Income Tax Credit and a Child Tax Credit of $1,000.
Original Article Posted at : http://www.accountingtoday.com/news/tax-fraud-blotter-motorbikes-and-manicures