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February 5, 2023

Accountants Behaving Badly: Ex-Senator’s Tax Guy Gets 18 Months, Embezzling $65M From Clients, Swindling Chamber of Commerce

Plus, retired Arkansas accountant pleads guilty to bank fraud, and soon-to-be-jailed Wisconsin accountant used stolen tax refunds to buy a hooker and drugs.

Accountant who helped Brian Joyce evade taxes sentenced to 18 months in prison [Boston Globe]
John Nardozzi, a CPA from Waltham, MA, who conspired with former Massachusetts senator Brian Joyce to cheat the IRS out of about $600,000, was sentenced on Jan. 9 to 18 months in federal prison.

Nardozzi, 67, was convicted by a jury in October of helping Joyce evade taxes through a series of schemes, including deducting more than $2 million in personal expenses by labeling them legal fees.

Nardozzi was ordered to pay more than $598,000 in restitution and serve three years of probation after his release. He is scheduled to report to prison on Feb. 20.

Joyce, a Milton Democrat who once served as the Senate’s assistant majority leader, died of a drug overdose in September 2018 while facing a 113-count federal indictment. Prosecutors had alleged he collected about $1 million in bribes and kickbacks and laundered them through his law firm.

Illinois accountant admits to embezzling $65M from clients [Associated Press]
Sultan Issa pleaded guilty on Jan. 10 to embezzling millions of dollars from a trustee of the Art Institute of Chicago, using the money to finance a luxurious lifestyle that included the purchase of yachts and homes.

Sultan Issa

Issa, 46, admitted in a plea agreement with federal prosecutors that the wealthy family wasn’t his only victim: he also stole millions from individual investors, including $500,000 from a widow who trusted him to invest funds from her late husband’s estate. He admitted to stealing a total of at least $65 million over seven years, although prosecutors say the final total could be higher.

He is scheduled to be sentenced on May 21.

The plea agreement doesn’t name Issa’s primary victim, but in court documents filed in separate civil cases, businessman and philanthropist Roger L. Weston identifies Issa as a former personal accountant for Weston family interests and accuses Issa of embezzling millions from them. Weston has sued Issa, seeking $100 million in damages.

Accountant charged with swindling $235,000 from Duluth Chamber [Minneapolis Star Tribune]
Jesse Frye was charged on Jan. 7 with felony theft by swindle on suspicion of stealing more than $235,000 from the Duluth Area Chamber of Commerce through his business, Eagle Accounting, between 2017 and 2019.

Jesse Frye

During an outside audit in July, it was discovered Frye, 39, was withdrawing and depositing unauthorized funds in his accounts, and he “would often disguise the withdrawal by labeling them as ‘Payroll,’” authorities said.

“When confronted, defendant first offered implausible and incorrect excuses for the missing funds” before he later acknowledged the thefts and offered a repayment schedule “without ‘outside action,’” the charges state.

Retired accountant accused in $9M embezzlement pleads guilty to bank fraud [Associated Press]
Edward Cooper Jr., a retired Arkansas accountant, pleaded guilty on Jan. 7 to bank fraud for a federal charge months after being hit with a $9 million civil judgment for embezzling funds from a manufacturing company.

Cooper, 71, admitted to stealing about $9.2 million from Roach Manufacturing Corp. for over two years. He also admitted to writing 138 unauthorized checks to himself on Roach’s account and forging signatures of company officials on the checks and then depositing them into his bank account.

Jefferson Co. accountant to spend 2 years in prison for filing false returns [WMTV]
David Zehnder, an accountant in Fort Atkinson, WI, was sentenced to two years in state prison on Jan. 2 after he filed dozens of false income tax returns and used the stolen refunds for a prostitute and drugs.

David Zehnder

Zehnder, 55, who owned A-Z Productivity Inc., filed at least 83 false income tax returns by overstating the itemized deduction credits on his clients’ returns by a total of $73,910.

He also stole, or attempted to steal, $32,312 of clients’ refunds by diverting a portion of the tax refunds into accounts he controlled.

He pleaded guilty to all five counts of tax fraud and theft in September 2019.

Court sentences accountant to 18 years in prison for defrauding church in Adamawa [Nigerian Tribune]
Ibrahim Aku, accountant for the Church of Brethren in Nigeria, was sentenced to 18 years in prison for defrauding the church of N15.5 million naira between 2016 and 2018.

The Economic and Financial Crimes Commission said the money was given to the church through offerings, donations, and tithes by church members.

Aku was convicted on six counts of bordering on forgery and obtaining money by false pretense.

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