Tax Fraud Blotter: Scam Relief

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A busy year; must love scams; emergency state; and other highlights of recent tax cases.

Salem, MA: Tax preparer Roosevelt Fernandez, 42, was sentenced to five years in prison and three years on supervised release after orchestrating two schemes involving COVID-19 relief funds and filings submitted using exhibits identity stolen.

As of 2018, Fernandez operated the tax preparation business Soluciones Multi Service. He used taxpayers’ personal identifying information to prepare and file fraudulent federal and state returns on their behalf without their knowledge. A number of these statements included fraudulent W-2s allegedly issued by employers for whom the named taxpayer did not in fact work.

Various fraudulent refunds were deposited into an account in the name of Soluciones Multi Service. A fraudulent PIE from May 2020 was also filed on this same account.

The investigation revealed some 40 fraudulent returns associated with Fernandez, totaling more than $620,000 in requested refunds.

In addition, he applied for 10 economic disaster loans, either on his own behalf or on behalf of entities he controlled. In June 2020, Fernandez applied for an EIDL under Soluciones Multi Service and submitted a false tax return in support of the application; the Small Business Administration deposited $124,900 into a bank account controlled by Fernandez from which he withdrew more than $80,000 in cash over the next two weeks. In August 2020, Fernandez applied for an EIDL on behalf of another company using fraudulent tax filing information; the SBA deposited $149,900 into the same account.

Fernandez, who pleaded guilty earlier this yearwas also ordered to pay $198,402 in restitution and forfeiture.

New York: Patrick Poux pleaded guilty to filing false claims for hundreds of thousands of dollars under the Paycheck Protection Program and EIDL aid.

Poux also pleaded guilty to fraudulently generating and submitting false return requests claiming millions of dollars in unearned refunds between 2016 and 2019.

Between March and September 2020, Poux fraudulently requested PPP and EIDL funds of approximately $320,000 on behalf of himself and corporate entities he controlled. He received some $183,000 and he spent that money on personal expenses such as a life coach and luxuries.

Between 2016 and 2019, Poux and others used false salary and withholding information on tax returns to steal refunds. Poux created fake tax forms for shell companies that had no operations or employees. He gave the conspirators tax forms that falsely stated that the conspirator had worked at a front company and had withheld income. The conspirators could then claim substantial refunds from the IRS; Poux received a percentage.

Poux and others have submitted some 250 claims seeking a total of about $2.8 million in federal refunds.

He faces up to 30 years in prison and a fine of up to $1 million.

Tampa, Florida: Tax preparer Monica Clyburn has pleaded guilty to three counts of assisting in the filing of false returns.

Cyburn worked for a tax preparation company in Sarasota, Florida for the 2014, 2015, and 2016 tax years. To inflate refunds, she prepared 1040 forms that falsely reported fictitious amounts in Schedules A Many of the statements she prepared for clients also contained false information about dependents. and some contained fictitious information regarding profits/losses from the operation of the businesses.

The tax loss for these three returns is approximately $11,921. The tax loss for other returns she helped prepare that contained similar misrepresentations was approximately $186,834.

She faces up to three years in prison on each count.

Brentwood, California: Jehoaddan Wilson, 41, was sentenced to 81 months in prison for filing false tax returns, wire fraud and aggravated identity theft in a tax evasion that caused losses of $902,040.

She obtained the victims’ social security numbers, then filed statements on behalf of the victim containing false information and fraudulently claiming reimbursements; Wilson requested that tax refunds be deposited between at least two bank accounts, one or both of which were his.

A victim provided his personal identifying information to Wilson on the understanding that Wilson, who posed as a legitimate tax preparer, would assist him in filing his statement. Unbeknownst to the victim, Wilson made numerous misrepresentations about the victim’s employment, expenses, and income on the tax return, who fraudulently claimed a refund. Wilson also requested, without the victim’s knowledge or consent, that approximately half of the refund be deposited into Wilson’s bank account.

Wilson or one of his associates also visited a woman’s retirement community and convinced her to provide her credentials to get free money from an alleged federal government “Obama Stimulus” plan. . Wilson used the information to produce a statement on behalf of the elderly woman without her knowledge. The return generated a fraudulent refund, and Wilson directed about half of the refund to his own bank account. Wilson obtained the information of a third victim and filed a false statement in his name while incarcerated and without his knowledge.

Searches of Wilson’s home and office revealed numerous additional documents containing the victims’ identifying information, including copies of driver’s licenses and social security cards.

In 2011 alone, she victimized some 388 people and her fraud cost the federal government $902,040.

She was also ordered to pay restitution of $902,040 and must serve three years of probation.

North Scituate, Rhode Island: Businessman Steven M. Allard, found guilty of embezzling more than $500,000 in social contributions collected from his employees to finance personal expenses, was sentenced to 33 months in prison.

Allard, the owner and operator of two local steel companies, admitted that between 2017 and 2018 at least, he failed to remit to the IRS more than $570,000 in federal employment taxes and withheld FICA payments to his employees. Instead, Allard used the money to pay for personal expenses, including buying more than $216,000 in credits from online dating site RussianBrides.com and $93,000 in rent for a luxury home. .

Allard, who pleaded guilty in 2020, was also sentenced to three years of probation and must pay $625,186.29 in restitution to the IRS.

This case marks Allard’s third federal conviction and conviction. In 2009, he pleaded guilty to tax evasion and fraudulent bankruptcy and was sentenced to 30 months in prison. He had previously been found guilty of accepting bribes from public employees and sentenced to 10 months in prison.

Germantown, Maryland: Former Federal Emergency Management Agency employee Shanta Johnson, 44, pleaded guilty to assisting in the preparation of false statements.

From January 2013 to at least April 2016, while employed at FEMA, Johnson prepared and filed false federal returns on behalf of her taxpayer clients; she prepared at least some of these statements while working at FEMA. False items on these statements included deductions, business expenses and education costs, all faked to inflate client reimbursements.

In total, Johnson prepared at least 194 statements. She created and used numerous email accounts to set up accounts on behalf of her clients on the online tax preparation software she used to make it look like her clients were preparing their own returns. Johnson didn’t list herself as a paid picker on any of them.

She charged for her services and, in many cases, directed a portion of her clients’ refunds to more than 20 bank accounts she controlled. She also did not report her tax preparation earnings on her own returns.

It caused a tax loss to the IRS of $217,424.

Johnson faces six to 15 months in prison and will have to pay compensation to the IRS. The sentence is August 30.

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