Accountants Behaving Badly: Guilty Plea In Panama Papers Case, NY Accounting Firm Arraigned, Owning Up to Ponzi Scheme

Plus, accountants from India are in hot water for embezzlement and fraud, and a Florida law firm accountant charged with attempted first-degree murder faces additional charges.

Accountant Pleads Guilty Ahead of Trial in Panama Papers Case [Wall Street Journal]
Richard Gaffey pleaded guilty in federal court on Feb. 28 to charges he helped a client evade U.S. taxes in a case stemming from a trove of leaked documents known as the Panama Papers.

Gaffey, a Massachusetts resident, had been scheduled to go to trial March 6. Instead, he pleaded guilty to an eight-count indictment that charged him with wire fraud, conspiracy to commit money laundering, and conspiracy to defraud the IRS, among other charges.

Gaffey helped clients evade U.S. taxes, including by obscuring their ownership of offshore shell companies and bank accounts holding tens of millions of dollars in investments, prosecutors said.

Long Island accounting firm submitted false NY tax returns for 267 clients, Nassau DA says [Newsday]
Kenneth Erdheim CPA PC was arraigned on Feb. 27 and charged with second-degree criminal tax fraud after prosecutors said the firm submitted false tax returns for 267 clients and denied the state nearly $130,000 in revenue.

Nassau District Attorney Madeline Singas said in a news release:

“The tax returns of more than 250 clients were allegedly mishandled by this company, costing the government nearly $130,000 in revenue. Due to this company’s alleged misdeeds, their clients now must repay that money to New York State even though they were unaware of the mistakes on the returns. We encourage everyone to research multiple tax preparers and to check their qualifications before filing returns this tax season.”

If convicted of the top count, the firm will have to pay $32,667 in fines. The firm is due back in court on March 5.

Berks County accountant pleads guilty to orchestrating one of the largest Pennsylvania-based Ponzi schemes in history [Justice Department]
Philip Riehl pleaded guilty on Feb. 27 to conspiracy and fraud charges related to a Ponzi scheme he operated worth approximately $60 million that targeted members of the Mennonite and Amish religious communities in Pennsylvania and elsewhere, of which he’s a member.

Riehl, 68, a Berks County-based accountant, was charged in January with one count each of conspiracy to commit securities fraud and wire fraud, one count of securities fraud, and one count of wire fraud.

Authorities say he fraudulently solicited tens of millions of dollars in investments, from his accounting clients and others who are mostly Mennonite or Amish, into an investment program that he operated.

Riehl then diverted funds from the program to Trickling Springs Creamery LLC, a Franklin County-based creamery of which he was the majority owner. Riehl also fraudulently solicited direct investments in Trickling Springs Creamery, according to authorities. He made material misrepresentations about the safety and security of these investments in his program and about the performance of the program, as well as misrepresentations and omissions about the creamery’s business and financial condition.

Trickling Springs Creamery announced it was ceasing operations in September 2019 and filed a bankruptcy petition in December 2019. Investor losses are estimated to be around $60 million, making this one of the largest Pennsylvania-based Ponzi schemes ever.

Grand theft added to law firm accountant’s charges [Gainesville Sun]
Linda Renee Williams, a Gainesville law firm accountant facing two counts of attempted first-degree murder, has been hit with additional charges of grand theft, money laundering, scheming to defraud, and aggravated battery with a deadly weapon.

Linda Renee Williams

Williams, 39, was first arrested on Jan. 17 after she reportedly stabbed her supervisor, Elizabeth Schulz-Seelbach, in the neck with a fish knife at Scruggs, Carmichael & Wershow.

An additional attempted murder charge was filed Feb. 19 based on allegations Williams tried to collide with Schulz-Seelbach as she drove to work earlier that day.

Jerome woman sentenced to up to 14 years for dairy theft [Associated Press]
Stephanie Wells, the former CFO and accountant of Box Canyon Dairy, was sentenced on Feb. 27 to 14 years in prison for stealing more than $660,000 from the southern Idaho dairy.

Wells, 35, will be eligible for parole after three years. She was also ordered to pay restitution to the Box Canyon Dairy.

Wells pleaded guilty to five counts of grand theft in November 2019, and in exchange prosecutors dropped 14 additional charges.

Philadelphia tax preparer convicted at trial of all counts [Justice Department]
Nvahbulai “Kosh” Quisiah, who owned Philadelphia-based tax preparation business First Premier Tax Service (d/b/a Kosh & Associates), was convicted by a jury on Feb. 28 on charges of preparing false tax returns, aggravated identity theft, and related crimes.

Quisiah was found to have prepared tax returns for clients that fraudulently inflated itemized deductions, claimed fictitious Schedule C businesses, and claimed false dependents for tax years 2009 through 2016. This resulted in inflated tax refunds for his clients to which the clients were not entitled. Quisiah also bought and sold the personal identifying information of children in order to falsely claim the children as dependents on tax returns.

He faces a mandatory minimum sentence of two years in prison for aggravated identity theft, and up to a maximum of 89 years’ in prison for the other convictions of conspiracy, wire fraud, and preparing false tax returns.

Other accountants behaving badly:

  • PSPCL accountant booked for embezzling Rs 8.4 lakh [Hindustan Times]
  • EOW arrests accountant for Rs 1.5 crore PF and ESIC fraud [Times of India]
  • Masala restaurant boss Rupinder Singh Chahil jailed for $700k tax evasion [Newshub]
  • Reagor Dykes accounting associate takes plea deal, admits her role in fraud [Everything Lubbock]
  • Accountant swindled Cornwall charity out of thousands of pounds [Cornwall Live]
  • Keetmans suspends accountant [The Namibian]
  • Convicted GRDB accountant injured ahead of new trial hearing [Stabroek News]
  • Lawyer and accountant charged in alleged money scam [FBC News]
  • Army accountants on fresh corruption charges involving over $750,000 [Nehanda Radio]

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