Here are some accountants who failed badly at being a trusted advisor.
Delaware County accountant charged with multiple tax offenses [Justice Department]
Myles Hannigan, an accountant from Newtown Square, PA, was charged by the U.S. Attorney’s Office for the Eastern District of Pennsylvania on July 3 with one count of obstructing the due administration of the IRS and 17 counts of preparing materially false income tax returns.
Hannigan owned and operated Payroll Professionals Inc., a third-party payroll processor that assisted clients by issuing payroll checks and forwarding tax payments to federal, state, and local authorities. PPI’s clients were small to medium-sized businesses that counted on Hannigan to prepare and file Form 941 with the IRS.
From January 2012 until December 2016, Hannigan allegedly prepared and submitted Form 941s that falsely reported information to the IRS, according to the U.S. attorney’s office.
In particular, Hannigan reported depositing more money to pay tax debt than he actually had sent to the IRS, causing 35 of PPI’s client companies to collectively underpay the IRS $3,270,566.89 for those tax years. These victims/companies gave Hannigan access to all necessary funds to pay the full tax debt, but Hannigan allegedly failed to do so. Hannigan hid his behavior from these victims/companies by presenting bogus documents that purported to be confirmation of payments of taxes he had made to the IRS on their behalf, and by re-directing IRS correspondence to his business address. In essence, Hannigan is alleged to have operated a “Ponzi scheme” of borrowing from one client’s money to pay the debts of another, which collapsed when the interest and penalties owed to the IRS (which he was hiding from clients) became too big to hide.
If convicted, Hannigan faces a maximum possible sentence of up to 54 years in prison, one year of supervised release, a fine of up to $1,805,000, and a special assessment of $1,800.
New York woman accused of embezzling thousands from Danbury dealership [Danbury News-Times]
Larnell Colontonio, who worked as a bookkeeper and accounts receivables clerk at Kia Motors in Danbury, NY, from March 2012 to January 2017, is facing an embezzlement charge for allegedly misappropriating tens of thousands of dollars from the car dealership.
Colontonio turned herself in on a warrant on July 2 and was charged with first-degree larceny after police say she stole more than $100,000 from Kia Motors over the course of nearly five years.
In May 2018, an office manager notified the owner of Kia Motors that the dealership was missing in excess of $200,000. The manager also noted a $45,000 discrepancy with a transaction made by Colontonio.
Colontonio had intentionally misappropriated the money by creating receipts with numbers either omitted or entered in a lesser dollar amount between April 2012 and January 2017. An audit revealed that Kia Motors lost $124,347.62 in that time frame.
Accountant ordered to pay £680K from fraud [Accountancy Daily]
Jeffrey Bevan, an accountant from South Wales who stole more than £1.7 million over a two-year period while working for the government of Bermuda, has been ordered to repay thousands in compensation.
Authorities say Bevan funneled the stolen money into property purchases in the U.K. He lived a lavish lifestyle on the stolen funds, buying racehorses, houses and flats, expensive cars, and betting online.
Bevan also went on to defraud his own mother, persuading her to give him money that he said he would invest on her behalf and instead pocketing the £50,000 for himself.
He pleaded guilty to 13 counts of money laundering and was sentenced to seven years and four months in prison in February 2018. In November 2018, he was sentenced to an additional 18 months for the theft from his mother.
Bevan was ordered to pay more than £688,000 in compensation to the Bermudan government, as well as to pay money back to his mother’s estate.
Norfolk accountant jailed for £250k fraud [Accountancy Daily]
Timothy Bash, who worked as a tax advisor at an accounting firm for three decades, is going to jail for defrauding his employer and clients out of almost £250,000 to pay for his gambling habit.
Bash was sentenced to three years in prison at Norwich Crown Court after pleading guilty to fraud by abuse of position at an earlier hearing.
In March 2017, Bash’s employer, the accounting firm Lovewell Blake, was contacted by the family of a recently deceased client claiming they had found a letter from Bash requesting a £4,500 loan. An investigation found that Bash had not recorded this arrangement with his employer and had only paid back £500.
Two days later, Bash requested a meeting with his managers and disclosed that he had a gambling addiction and that he had been taking money from clients over a number of years. This resulted in Lovewell Blake management calling the police and Bash was arrested.