November 26, 2020

Accountants Behaving Badly: Deloitte Malaysia Partner Fined, Guilty Plea In $1.2M Scam, Jailed for Xmas

Plus, several tax preparers have run afoul of the law.

SC fines Deloitte’s partner for non-compliance [The Malaysian Reserve]
Huang Khean Yeong, a partner at Deloitte PLT, was fined RM63,000 by the Securities Commission Malaysia’s Audit Oversight Board on Dec. 26 for failing to comply with the international standards on auditing when performing an audit of a public interest entity (PIE).

Huang was disciplined for failing to design and perform audit procedures involving multi-location audit of the PIE and insufficient audit procedures including group consolidation, construction contracts, and goodwill.

The SC in a statement said Huang is not appealing the fine. The capital market regulator did not name the PIE.

Upper Valley accountant to repay $1.2 million [New Hampshire Union Leader]
Ryan Wall, owner of TSBS Payroll in West Lebanon, NH, pleaded guilty in U.S. District Court in Rutland, VT, on Dec. 19 to one count of wire fraud and agreed to repay $1.2 million he stole from clients over several years.

He’s scheduled to be sentenced in April 2020 and could face up to 20 years in prison. He was recently indicted by a grand jury in Vermont on one count of wire fraud and one count of unlawful transportation of firearms.

Wall’s company took funds from client businesses and then used that money to issue payroll checks and pay taxes for the businesses. He issued hundreds of checks without authorization to third parties, who “then cashed the checks and gave the money back to Wall, or used the funds to buy [prescription] drugs that were given to Wall,” according to the indictment.

Stoke-on-Trent accountant ripped £100k off clients and taxman – now he’s in jail for Christmas [Stoke Sentinel]
Michael Boffey was sentenced to four years in jail on Dec. 24 after ripping off his clients of more than £56,000 and failing to pay £40,000 in VAT or income tax on his company, Midina Lane Ltd.

Boffey, 61, submitted fraudulent tax rebate claims on behalf of his clients without their consent through his three accounting firms: Out of Pocket Service Ltd., Oops Now Ltd., and Midina Lane.

As a result, he kept £46,502 that should have gone to the tax man and also pilfered £56,623 that should have gone to his clients in tax rebates or should have been paid on his clients’ behalf.

Philadelphia tax preparer admits to $915k tax fraud [Patch.com]
Philadelphia-based tax preparer Jose Santiago recently admitted to tax fraud that resulted in more than $914,000 in losses to the IRS.

Santiago, 48, who owned Santiago Tax Service, pleaded guilty to six counts of preparing false income tax returns.

Authorities said Santiago inflated his clients’ unreimbursed employee business expenses and charitable donations, causing his clients to receive tax refunds that they were not entitled to. In total, Santiago created a roughly $914,635 loss to the IRS.

Three years in prison for tax preparer who cost IRS $2.8 million with false returns [The News & Observer]
Moses Whitaker, a tax preparer in Rocky Mount, NC, was sentenced to three years in prison on Dec. 17 and ordered to pay $167,285 in restitution for filing false tax returns and costing the government nearly $3 million.

Whitaker, 44, who owned M&S Tax Service and MIX Tax Service, was charged in April with aiding false returns, accused of helping to create fictitious dependents, inflated withholdings, education credits, and unreimbursed business expenses, all of which brought clients refunds they did not deserve.

He also was accused of making untrue statements on his own tax returns.

Maryland tax preparer pleads guilty to preparing false returns and aggravated identity theft [Justice Department]
Maria Espinal will be sentenced on April 2, 2020, after she pleaded guilty on Dec. 19 to aiding and assisting in filing false tax returns and aggravated identity theft.

From 2011 through 2017, Espinal, who owned a tax return preparation business in Gaithersburg, MD, prepared and filed fraudulent tax returns on behalf of her clients with the IRS and the comptroller of Maryland that claimed tax refunds to which the clients were not entitled. To generate a fraudulent refund, she altered legitimate Forms W-2 in the names of third parties and replaced the third party’s name with her client’s name. As a result, her client claimed the third-party’s withholdings as his or her own, which generated fraudulent tax refunds.

In addition, Espinal displayed a sign on her office wall that read in Spanish “If you have lost your [identification] number or passport we have these people” and which listed the identifying information for several individuals. She used the personal identifying information for one of those individuals to obtain a fraudulent refund on behalf of another client.

Espinal also filed a tax return using another individual’s personal identifying information to generate a fraudulent refund that she deposited into her own personal bank account.

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