Accountants Behaving Badly: Fraud Isn’t All It’s Cracked Up to Be
I never thought I’d ever write the words “egg accountant busted in embezzlement scheme” but here we are. The egg accountant, Jonathan Weston, was indicted by a federal grand jury in Pittsburgh June 3 on charges of fraud conspiracy, money laundering conspiracy, and tax fraud. According to the U.S. Attorney Office for the Western District of […]
Your Naughty Tax Preparer of the Day
After being indicted last week on 35 counts of aiding and assisting in the preparation of false and fraudulent tax returns and two counts of willfully failing to file personal income tax returns, Ametra Q. Wooden should probably change the name of her tax preparation business to F Plus Tax Experts & Financial Services, amirite? […]
Your Naughty Tax Preparer of the Day
If you search for reviews on Yelp of the best tax preparation firms in the Bronx, it’s no surprise you don’t see RAP Tax Services among them. Maybe it’s because the owner admitted to submitting false and fraudulent tax returns on behalf of clients, falsely claiming dependents, nonexistent charitable deductions, or bogus business expenses. Yeah, […]
Your Naughty Tax Preparer of the Day
Like father, like son. On Nov. 5, 2013, Cleo Reed was sentenced to 30 months in federal prison by the U.S. Attorney’s Office in the Western District of Washington for filing more than 1,300 fraudulent tax returns between October 2007 and July 2010, resulting in a tax loss of $4.2 million. Authorities said Reed inflated […]
Accountants Behaving Badly: DOJ Has Been Busy Busting CPAs For a Variety of Crimes
Plus, a Louisiana tax preparer who pleaded guilty to four counts of tax fraud will be sentenced on Tax Day. New York Accountant Pleads Guilty to Federal Tax Charge [Justice Department] James Guerra, a CPA from Dix Hills, NY, waived his right to be indicted and pleaded guilty on Jan. 25 to a federal tax […]
Accountants Behaving Badly: Insider Trader Settles with SEC, Embezzler Gets Jail Time, Maritime Thief
Plus, accountant’s tax fraud conviction upheld in court, and a Canadian accountant is banned by financial regulator. SEC charges biotechnology company CPA with insider trading [SEC] Jana Faith Kiena, CPA, a former contract accountant in the revenue recognition group at biotech company Illumina, will pay about $374,000 to settle insider trading charges for using confidential […]
Tax Preparers Behaving Badly: Getting Barred, Facing Jail Sentence, Doin’ Time
Usually this column is reserved for accountants doing bad things. But this week we are focusing on the worst of the worst tax preparers. Federal court permanently bars former Liberty Tax Service owners from tax preparation business [Justice Department] Steven Doletzky was permanently barred by a federal court in Tampa, FL, from operating a tax […]
Accountants Behaving Badly: Ex-UAW President Charged with Embezzlement, Not Guilty Plea In Theft Case, Tax Fraud Sentencing
Plus, an accountant in India was arrested for secretly recording videos of women taking baths, and an Oklahoma City accountant was sentenced to 18 months in jail for embezzling more than $175,000 from her former employer. Former UAW President Gary Jones charged in U.S. corruption probe [Reuters] Former United Auto Workers President Gary Jones, who […]
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 […]
Accountants Behaving Badly: Too Many Pints, Fraudster Gets 18 Months In Jail, Egypt Tax Authority Chief Arrested
Plus, a couple of tax preparers thought they could get away with defrauding the IRS. They were wrong. Drunk trainee accountant crashed car after Leeds night out [The Yorkshire Post] Archie Scott was banned from driving for 20 months and was sentenced to 12 months of community order with 50 hours unpaid work after he […]
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 […]
Accountants Behaving Badly: Drugs and Sex Trafficking, Bookkeeper Busted for Embezzlement, Visa Fraud
Plus, a bunch of tax preparers are going to be spending some quality time in jail. Kentucky man charged with sex trafficking, drug conspiracy [Associated Press] Mark Milslagle, a former Kentucky accountant accused of paying for sex with young women who were addicted to drugs, faces federal conspiracy charges. Milslagle, 49, was charged on Nov. […]
Accountants Behaving Badly: Jailed Over Ponzi Scheme, Firm Fined In Pot Bust, Embezzlement Admission
Plus, tax preparers plead guilty to preparing fraudulent returns, and the owner of a tax preparation business failed to file his own taxes. Gambling accountant gets 14 years for $396M Ponzi scheme [Law360] Texas CPA Jay Ledford will serve 14 years in federal prison for his supporting role in a Ponzi scheme that netted $396 […]
Accountants Behaving Badly: Ripping Off Olympian, Ex-IRS Employee Jailed, Stealing From Your Own Firm
Plus, a Massachusetts accountant pleads guilty to tax fraud, and a Toronto accountant gets prison time for stealing from charity. Oregon CPA who ripped off Olympic snowboarder and spent trust fund of porn shop heirs headed to prison [The Oregonian] Nathan Wheeler was sentenced to four years and three months in federal prison on Oct. […]
Accountants Behaving Badly: Defrauding the IRS, Stealing From School, Drunken Leadfoot
Plus, an accountant allegedly stole thousands from an ice rink construction company, and a male tax preparer who pretended to be a woman named Alyssa Jean Pipes is accused of screwing over his clients. Former state senator’s accountant convicted of tax fraud [Justice Department] John Nardozzi, an accountant for former Massachusetts senator Brian A. Joyce, was […]
Accountants Behaving Badly: Tax Fraud, ‘Hopelessly Conflicted’ About Ethics, RICO Suave
Let’s see who made the news last week for conduct unbecoming of an accountant. Westchester tax accountant sentenced for tax fraud [Patch] Yorktown Heights, NY-based accountant Steve Sabba was sentenced to five years’ probation on July 18 after he pleaded guilty to third-degree criminal tax fraud and fourth-degree criminal tax fraud, both felonies, in February. […]
Butthurt Dudes Say They’re Reporting Sexy Snapchats to the IRS
We’re not a huge fan of tax stories around here mostly because if our traffic logs are any indication, you guys aren’t either. But we’re making an exception as A) I relish any opportunity to talk about porn on this website, and B) this is probably the most interesting IRS-adjacent story we’ll publish all year. […]
Michael Cohen Pleads Guilty to Five Counts of Tax Evasion; Jury Finds Paul Manafort Guilty of Tax Fraud
We here at Going Concern have always (well, except from May 17, 2018 to July 24, 2018) given you an outlet to comment on the big news of the day. Well, two pretty big news stories broke at the same time earlier this afternoon that do not bode well for our commander-in-chief. First, in a […]
Report: Feds Examining Whether Michael Cohen Committed Tax Fraud
Federal prosecutors are already investigating possible crimes related to the business affairs of President Trump’s former personal attorney, fixer, and bulletproof vest, Michael Cohen, including bank fraud, campaign-finance violations, and hush payments made to cover up alleged flings Trump had with a porn star and a Playboy model. So, hey, why not throw tax fraud […]
Florida Still Cranking Out Unsophisticated Tax Schemes
If you or someone you know is thinking about concocting a haphazard tax fraud, it may be tempting to go with a tried and true method that goes something like this: Step 1: Reside in Florida Step 2: Steal a bunch of taxpayer information Step 3: eFile a bunch of tax returns with this stolen […]
After Being Convicted of a $100 Billion Tax Fraud, Skipping Your Sentence to Hit the Links Is the Next Logical Step
If you had recently been convicted of a $100 billion tax fraud and it were the day of your sentencing, how would you spend those last hours of freedom? Visiting with friends and family, perhaps? Taking one last tumble in the sack with your beloved? Walking your dog? Eating at your favorite restaurant? Squeezing in […]
Georgia Man Discovers IRS Wasn’t Joking About the Possibility of His Fake Treasury Bond, Fraudulent Tax Return, Bogus Refund Landing Him in Jail
If you are currently thinking about engaging in any tax fraud, you should know that if the IRS is gracious enough to inform you that your actions — like, say, claiming ownership of a treasury bond that it is most likely fake and requesting a large, bogus refund — could result in prison time, calling […]
Bad Spelling Can Derail an Otherwise Promising Career in Fraud
For God's sake, get a good education.
A Maine Woman’s Illiteracy Will Be a ‘Fact of Significance’ in Her Tax Fraud Case
Not having a firm grasp on taxes is rarely an acceptable defense for committing tax-related crimes. HOWEVER, a woman in Maine is employing a slightly different angle for her defense: Carole Swan testified Wednesday during a suppression hearing in U.S. District Court in Bangor that she’s basically illiterate. Swan’s inability to read much more than names […]
Alternative Career Paths for Disgruntled Accountants (or You’d Probably Be Really Good at Tax Fraud)
Your bonus sucked. Your raise didn't meet your expectations. You're tired of working for the Man. Maybe you should consider the exciting world of tax fraud. As CPAs, our knowledge, training, and experience has positioned us strategically to do fraud right. But do you really have what it takes to commit tax fraud? And by […]
Woman’s Absurdly Unsophisticated Tax Scheme Still Managed to Dupe The Oregon Department of Revenue
As we've witnessed, perpetrators of tax fraud oftentimes utilize very simple methods. Slapping a dead person's name, birthdate, social security number, isn't terribly difficult once the data is obtained; throw some minors on there as dependents and you've got yourself a nice little refund at the expense of some grieving family members. Not complicated. You […]
David Cay Johnston Has a Plan to End Tax Fraud
If you thought that tax hack David Cay Johnston was going to idly stand by while the country's tax system spins into a ferocious web of inexplicable rules and soaring criminal deceit, you'd be wrong! Oh, so wrong. The bearded man has a plan and in his Reuters column, he explains that it's really pretty […]
One Chicago Woman Apparently Felt That 293 False Tax Returns Was Not Enough
You have to wonder how efficient both the IRS and Social Security systems are in this country if one person can file fake claims for 3 years before finally getting busted. According to the Chicago Tribune, 35 year old Zorana Theresa Charleston-Black filed 293 false tax returns between 2005 and 2008 for refunds the amount […]
New Website Allows You to Rat Out That Tax Cheater in Your Life Without Fear of Being Identified
Do you happen to know for an absolute fact that a former co-worker was taking their threadbare clothes to the Salvation Army and claiming them as being in “good condition”? Does your ex-girlfriend/boyfriend exaggerate the expenses they incur from their side business? Does your neighbor’s six-year old underreport their lemonade stand profits? Are you looking for a way to get back at them without the fear of a confrontation? Good news! Taxsqueal.com will let you snitch on them anonymously and you don’t have to deal with any scary IRS forms.
Al Drucker – a former IRS agent – founded Taxsqueal because he thought there was lots of opportunity for Joe or Jane Whistleblower to do their part in closing the tax gap but were maybe hesitant because the idea of being on hold was too much to bear (that and the Big Brother thing):
He said the IRS once manned a toll-free telephone number, but callers to that number now are met with an automated message that directs them to the IRS website. Other potential callers are uneasy about contacting the government and worry they won’t stay anonymous.
Drucker’s idea: Develop a website in which informants can fill out an easy-to-use form written in plain English. TaxSqueal.com then forwards the information to the IRS and erases from its computer system information about the person making the allegation.
The catch is you have to be willing to do it as an act of patriotic duty or hateful spite as opposed to landing a tidy reward for narking out a tax scofflaw:
Whistleblowers would miss their chance to collect. But Drucker figures most people aren’t eligible for a reward anyway, because most of the cases that come into TaxSqueal.com are for less than $2 million.
What’s in it for whistleblowers? Not much. “This site is not designed for people seeking rewards,” Drucker said.
Sweet revenge awaits.
People can report tax cheats on new website [Daily Record via AT]
That Duke Snider Autograph May Have a Tax Story Behind It
Snider returned to Brooklyn on a sad note on July 20, 1995, when he appeared in federal court, a couple of miles from where Ebbets Field once stood, as a criminal defendant. Snider and another Hall of Famer, the former Giants first baseman Willie McCovey, pleaded guilty to tax fraud for failing to report thousands of dollars earned by signing autographs and participating in sports memorabilia shows. “We have choices to make in our lives,” Snider said. “I made the wrong choice.” [NYT]
‘Forging and Selling Invoices to Avoid Taxes’ in China Is No Longer Punishable By Death
We Americans do love a good firing squad/lethal injection/electric chair/hangin’ but the Chinese make us look like a bunch of pansies by comparison. However, after several millennia, China might be getting soft in its old age. As the Associated Press reports, some economic crimes have been pulled from the “do this and die” list:
Thirteen economic, nonviolent offenses will be removed from the list of 68 crimes punishable by death, said Lang Sheng, who heads a legal committee for the National People’s Congress, China’s legislature. The 13 crimes include forging and selling invoices to avoid taxes, and smuggling cultural relics and precious metals such as gold out of the country.
However, it should be noted, “[A]n expert said the move was unlikely to significantly reduce executions, since people convicted of those crimes in the past have rarely received the maximum penalty and capital punishment can still be used to punish other economic crimes such as corruption.”
We’re not intimately familiar with all the potential criminal tax pitfalls in China, so it’s safe to assume there are plenty of other tax crimes that will still get you the dirt nap. International tax scofflaws should tread carefully.
China drops death penalty for some economic crimes [AP via Gawker]
Area Man Sentenced to Serve Pizzas in Lieu of Jail for Sales Tax Fraud
Buffalo. City Mission. Tuesdays. For a year. Unless you’re really hard up for some nourishment, we would avoid with extreme prejudice. This will make the Denny’s freebies look like a mess hall at Fort Bragg.
Joseph J. Jacobbi, 57, operator of Casa-Di-Pizza, a popular Elmwood Avenue restaurant, was spared a jail term on his massive sales tax fraud case, but the judge Monday ordered him to deliver 12 sheet pizzas to the City Mission once a week on Tuesdays for the next 52 weeks, beginning [yesterday].
After Jacobbi turned over a check for $25,000 — part of the $104,295.31 court officials said he withheld from the state between March 2004 and the end of May 2008 — the judge ordered the weekly pizza deliveries as a form of community service.
“I will leave the choice of toppings up to you,” he told the nonplussed restaurant owner.
Not that we don’t appreciate the judge’s creative sentence but shouldn’t the people at the mission get to choose the toppings?
Oh, wait…
Tax cheat sentenced to serve … pizzas [Buffalo News via TaxProf]
Car Dealers Indicted for Tax Fraud; Profession’s Shifty Reputation Remains Intact
Plus, one of the (alleged!) tax fraudsters is facing seven counts of manslaughter. Impressive.
James Pflueger, a landowner facing seven counts of manslaughter on Kauai for the deaths of seven people killed when the Kaloko dam broke in 2006, was indicted Wednesday by a federal grand jury for tax fraud.
Altogether, five defendants were charged with conspiracy to defraud the U.S. for the purpose of obstructing the Internal Revenue Service in its collection of taxes.
They include Pflueger’s son, Charles Alan Pflueger, who owns car dealership Pflueger Inc.; company chief financial officer Randall Ken Kurata; Charles Alan Pflueger’s executive assistant, Julie Ann Kam; and certified public accountant Dennis Lawrence Duban.James Pflueger, 83, is the former owner of the company.
The Plfuegers are proven business people but they simply can’t be expected to have the first damn clue about these tax matters:
Dave Scheper, an attorney representing Charles Alan Pflueger, issued a statement denying any wrongdoing by his client and also vowed a vigorous defense.
“He is a proven businessperson who always acts in good faith, but he is not and has never pretended to be a tax accountant,” Scheper said.
So naturally, the blame is going straight to the CPA in this case, Dennis Duban, but not because he screwed over Pflueger & son and their sterling reputations but because he just plain sucks at preparing tax returns.
An attorney for Duban said he looks forward to arguing the case in court. “We are confident that after a jury hears all of the evidence, Dennis will be completely exonerated,” said attorney Michael Purpura.
This is one of those cases where it will take about five minutes of poking the accountant with a stick and he’ll flip.
Accounting News Roundup: Reasons Why CFOs Are Still Stalling on Cloud Solutions; IASB Trumpets Latest Convergence Steps; OCA Gets a Deputy | 05.28.10
What’s stopping CFOs putting their money on cloud computing? [Silicon.com]
Some CFOs are still hesitant to jump into cloud computing for three main reasons: 1) They aren’t sure what they’re getting for their money 2) Security and information assurance 3) The cost of migrating their data.
All legitimate concerns, however steps can be taken and questions asked in order to address most concerns (or at least put CFOs in a better informed position than before):
1) “Ask providers to clarify how they intend to deliver your service so that you understand the risks involved and know exactly what you are getting for your money.”
2) “Undertake due diligence and ensure that cloud providers can replicate the appropriate security policies and procedures. Agree realistic [Service Level Agreements] and make certain that services are scalable enough to meet present and future requirements. Finally, ensure that everything is clearly written down in the contract.”
3) “Evaluate how much time, effort and money will be required to migrate data and rework business processes.”
IASB unveils profit and loss proposals [Accountancy Age]
It appears that Tweeds and Co. like the U.S. GAAP method of presenting Other Comprehensive Income: “If adopted, these proposals will result in further convergence of IFRSs and US GAAP in an increasingly important part of the financial statements.”
Buffett to Testify to Crisis Panel on Moody’s [WSJ]
This will be a breeze – folksy insights with a dash of sexual metaphors will clear up this area of the crisis. Plus, no one is going to scold an old man.
H & H bagel big cops to $369,000 tax fraud [NYP]
Helmer Toro simply kept the money. He’ll spend 50 weekends in jail for that little stunt.
Brian T. Croteau Named Deputy Chief Accountant for Professional Practice in SEC Office of the Chief Accountant [SEC]
Prior to the new gig, Mr Croteau was a Senior Associate Chief Accountant at the OCA. He joined the OCA after being a partner in the Assurance practice at PwC in the Auditing Services Group. He obviously wasn’t bothered by the Partner to Senior Associate title change. It must have been the “Chief Accountant” suffix.
Accounting News Roundup: Grant Thornton Moves DC Office; CPAs Are Less Clueless on IFRS; The IRS Wins Twice | 05.25.10
Grant Thornton moves D.C. office [Washington Business Journal]
GT DC is moving from its cushy confines of 19,450-square-feet at 1900 M St. NW to 15,190-square-feet at 1250 Connecticut Ave. NW.
Mary Moore Hamrick, the company’s national managing principal of public policy thinks this move is crucial saying, “Grant Thornton’s public policy group is taking a more proactive role in shaping the dialogue on accounting issues. This move will support the public policy group’s expansion as we seek to do our part in restoring confidence in the capital markets.” Better feng shui probably.
AICPA Survey Shows US CPAs Gaining in Awareness of International Financial Reporting Standards [AICPA Press Release]
CPAs are less clueless on IFRS, sayeth the AICPA:
The latest AICPA tracking survey shows a sustained shift toward greater awareness of International Financial Reporting Standards (IFRS) among U.S. accountants. Nearly half, 47 percent, of CPAs in the survey conducted April 20 to May 7 said that they already have basic knowledge of IFRS, an advancement from 39 percent who had basic knowledge in October 2008. At the same time, there has been a continuing decline in the number of CPAs who say they have no knowledge of IFRS; 16 percent in the latest survey, down from 30 percent in October 2008.
U.S. Supreme Court upholds IRS power in tax case [Reuters]
Those super secret corporate legal documents that discuss contingent liabilities? The IRS may be able to request them whenever they like, as the Supreme Court upheld a First Circuit ruling by denying certiorarit in the case.
In U.S. v. Textron, Inc., the company claimed that such documentation was privileged. The First Circuit disagreed:
[I]n its ruling against Textron, set a new test, under which every party in commercial litigation whose opponents file financial statements with contingent liabilities for litigation will be able to obtain documents detailing such exposure, according to Douglas Stransky, an attorney at Sullivan and Worchester in Boston who represents corporate clients.
“The First Circuit’s decision has eviscerated the work product protection that exists to protect exactly the type of attorney analysis that was present in this case,” he said. “It’s surprising that the Supreme Court did not recognize this.”
Florida Keys inmate pleads guilty in IRS scam [Miami Herald]
Shawn Clarke, an inmate at a Florida prison, pleaded guilty to conspiracy yesterday as the ringleader to a tax fraud scam in which he requested bogus refunds from the IRS in the amount of $115,000. It wasn’t exactly a complicated scam, as the inmates and their family members submitted 1040EZ forms along with Form 4852 to request the refunds, all for around $5,000.
Clarke was convinced that this was the best idea ever, allegedly saying, “I’m through with the street crime. I’m strictly white collar from now on. I love the IRS.” He’s looking at an additional 10 years.
Just to Be on the Safe Side, the Dayton, Ohio H&R Block Should Be Prepared for More Trouble
If you figure one H&R Block employee was nearly gunned down because they were being audited, God knows what an indictment would mean for the safety of their employees:
A federal grand jury has indicted West Carrollton club owner and Brookville resident Stanley W. Combs III on the charges of one count of operating an illegal gambling business and four counts of making false statements on federal income tax returns…
…The indictment alleges Combs substantially under-reported the income he received as the owner and operator of Fraternal Order of Orioles, Nest 293 at 842 Watertower Lane in West Carrollton and a related entity at 10955 Lower Valley Pike in Medway, Ohio.
There’s no indication that an H&R Block employee advised this particular alleged tax dodger but better to be prepared.
Related: Did anyone tell these crazies in Ohio that they can get help FOR FREE tomorrow? For crissakes, there’s even one in Dayton at 200 W. Second St. Pull yourself together Buckeye State.
Club owner indicted for illegal gambling, income tax fraud [Dayton Daily News]
The IRS Would Like to Remind You That They are Not Spammers
With tax season over, scam season has begun and the IRS wants to be sure that you know they will never send you unsolicited e-mails or request identifying information about you a la PayPal scams. Because, you know, they’re helpful like that. Since many of you are waiting patiently by your mailbox (or bank statement if you E-filed for direct deposit) for your refund checks, it’s all that much more important to be on the lookout for these kinds of tricks hitting your inbox.
Protect yourself, little taxpayer, and know that the IRS is here to help make sure you don’t get scammed by unscrupulous impersonators:
The IRS does not send taxpayers unsolicited e-mails about their tax accounts, tax situations or personal tax issues. If you receive such an e-mail, most likely it’s a scam.
IRS impersonation schemes flourish during filing season. These schemes may take place via phone, fax, Internet sites, social networking sites and particularly e-mail.
Many impersonations are identity theft scams that try to trick victims into revealing personal and financial information that can be used to access their financial accounts. Some e-mail scams contain attachments or links that, when clicked, download malicous code (virus) that infects your computer or direct you to a bogus form or site posing as a genuine IRS form or Web site.
Some impersonations may be commercial Internet sites that consumers unknowingly visit, thinking they’re accessing the genuine IRS Web site, IRS.gov. However, such sites have no connection to the IRS.
IRS Spokesperson Jennifer Henrie-Brown gave us a few tips for avoiding scams and reporting sketchy e-mails to the Service to combat the spamming problem: “The IRS does not initiate taxpayer communications through e-mail and does not request detailed personal or financial information through email. If you receive an e-mail from someone claiming to be the IRS or directing you to an IRS site, you should not reply. Do not open any attachments or click on any links. Doing so may download malware that can damage your computer or allow remote access to your hard drive,” she told us.
What do you do if you get one of these weird, misspelled, bad-grammar-infested fake e-mails claiming to be from the IRS? “If you receive a suspicious email claiming to be from the IRS, or Web addresses that do not begin with http://www.irs.gov, you can relay that email to IRS mailbox [email protected]. IRS can use the information URLs and links in the suspcious emails you sent to trace the hosting Web site and alert authorities to help shut down the fraudulent sites.”
Suggested reading: Online Scams that Impersonate the IRS [IRS]
Utah Accountant Who Filed $393 Million in Fake Tax Refunds Can Never Ever Ever Do Taxes Again
Dick Jenkins is a bad, bad tax accountant; the Justice Department says so.
“Given the sheer brazenness of Jenkins’s conduct, he is essentially stealing … from the U.S. Treasury,” said U.S. District Judge Dale A. Kimball, who entered the civil injuction against him last week. Jenkins was accused of filing $393 million in fraudulent tax refunds, including a single $210 million dollar refund for one customer and $402,920 for himself that he didn’t have coming (I don’t care how good you think you are at deductions, that’s BS).
Jenkins was not barred by the court from doing taxes forever because he screwed his clients (they received $294,292 in fake refunds) but because “Jenkins’s conduct results in irreparable harm to the United States.” You heard right, the Salt Lake Federal Court is pissed because he tried to remove $393 million from the Treasury through tax fraud, who cares about the clients?
Maybe this is what the PCAOB was talking about when they mentioned unusual transactions without giving specifics. I’d say it qualifies.
Salt Lake Federal Court Bars CPA from Preparing Tax Returns for Others [Media Newswire]
Former NFL Player Avoids Prison…for Tax Fraud
Typically when current or former NFL player gets into trouble with the law it usually consists of 1) drugs/alcohol 2) assault 3) the occasional (or shockingly frequent?) homicide.
Former Buffalo Bills running back Darick Holmes pleaded guilty last year to 15 counts of tax fraud and order to pay $53k in restitution to the IRS. He had been running a scam in Buffalo showing people how to file bogus tax returns, “Holmes admitted that, while spending time in Buffalo in 2004 and 2005, he helped people file tax returns that listed false information about where they had worked and how much they paid in taxes. When the tax filers received refunds, Holmes got a cut of the money.”
Holmes was sentenced to one year of home confinement which had the prosecutor all bent out of shape since Holmes’ co-defendant, Darryle Buckner, was sentenced to a year in prison and wasn’t found to be as “culpable” as Holmes. The judge felt that Holmes was remorseful (that’s a new one for a tax crime) and was impressed with his work with troubled teens.
Holmes has had a rough go of it, he was shot seven times right after his arrest in 2008, according to the prosecutor it was during an $80,000 marijuana deal. Yeesh, This prosecutor guy is really pissed about this sentence.
The real moral of the story is you’re probably better off listening to Joe Biden (?) than an ex-NFL player when it comes getting tax advice.
Ex-Bill Holmes avoids prison in tax fraud case [Buffalo News]
Lesson of the Day: When Requesting a Bogus Tax Refund, Avoid an Excessive Amount
It makes sense that financial crimes increase during a recession. People get desperate and they start taking crazy-ass chances. Crazy-ass chances like, let’s request a tax refund for a couple hundred million dollars.
Justice.gov:
Papers filed in the cases say the defendants prepared tax returns requesting a total of $562.4 million in bogus refunds. One defendant – Dick Jenkins, of Heber City, Utah – allegedly holds himself out as a CPA and requested a $210 million fraudulent refund for one customer. The Internal Revenue Service (IRS) catches the vast majority of the bogus tax returns and blocks the claimed refunds…Altogether, according to the IRS, redemption scheme participants (including customers of the defendants in the seven lawsuits filed this week) have requested a total of $3.3 trillion in fraudulent refunds.
According to the AP, “Officials say the tax preparers often falsely tell customers the government maintains secrets accounts of money for its citizens that can be accessed by filing false returns.”
So your tax preparer tells you that by filing a fake tax return you’ll be able access a secret pile of money. Is this remotely believable? Believable to the point of saying, “Excuse me, Internal Revenue Service, you owe me $210 million”?
Some discretion, people.
DOJ Charges Seven With Seeking $562m of Bogus Tax Refunds [TaxProf Blog]
Feds file suits over $562 million bogus tax claims [AP]
KPMG Partner Named in $240 Million Tax Fraud
This is getting awkward, KPMG. Tax shelters continue to be a problem for some of your partners.
Three local businessmen have been indicted on a charge of conspiracy to defraud the Internal Revenue Service of more than $240 million.
According to the indictment filed in federal court on Oct. 22, two of the men allegedly attempted to defraud the IRS by making several “false and misleading statements” concerning a corporate tax shelter that was implemented by them.
Daryl J. Haynor, a partner in KPMG’s federal tax practice for the mid-Atlantic Area, based in Tysons Corner; and Jon Flask, a Vienna-based attorney, are both named in the suit.
“Mr. Haynor has been placed on administrative leave pending a review of the situation,” said George Ledwith, a spokesman for KPMG, on Monday.
Obviously our little warning concerning tax shelters was way too late.
According to the federal indictment, Flask, Haynor and Parker implemented and marketed a tax shelter named “Sale Leaseback of Tenant Improvements Strategy (SLOTS),” from 1998 through 2006.
The shelter enabled various U.S. corporations to claim tax deductions totaling more than $240 million on corporate income tax returns.
The indictment alleges that Flask, along with Haynor and Parker, misled and deceived the IRS by misrepresenting facts concerning the SLOTS tax shelter during IRS audits of companies claiming tax losses generated by the shelter in the years 2002 through 2004.
Mr. Haynor has been with KPMG for over 25 years. He and Mr. Flask face up to eight years in prison and $500,000 in fines. If you know any details, shoot us an email or discuss in the comments.
Needed: Honest CPA’s for New York State
As if the State of New York doesn’t have enough trouble with half of the citizens think their legislature is the worst in the country, annoying artwork, and a budget crisis. Come to find out, part of this whole budget nightmare might be due to an unusual amount of bogus tax returns.
This is a quote from a profile of the NYS Deputy Commissioner of Tax Enforcement (our bolding):
The rest, after the jump
This year, we’ve done a little project on tax preparers. We go out pretending to be tax preparers … we’ve done it at 170 different tax preparers. Fifty-one of them have prepared bad returns that are just horribly fraudulent. I have some transcripts … here’s one: a tax prepared describes how he’s gonna do a ‘ho-hum, no muss, no fuss, simple [expletive] return that’s gonna get through the system’ and he’ll never get audited and never get caught. He underreports income then for two years of about $80,000. That he knows. Do you think he knew what he was doing? He was selling our investigator as a taxpayer, ‘I know how to cheat without getting caught.’ … We’ve arrested about 20 this year so far. And there’s lots more in the wings.”
Horribly fraudulent? God help us.
Capital Profile of William Comiskey [Albany Times Union via TaxProf Blog]
The IRS Should Really Reconsider Their Employee Screening Process
In another case of former a IRS Agent having reckless disregard for their old employer (i.e. the Federal Govt.), a 76 year-old former agent was sentenced to nearly four years in prison for his part in a fraudulent tax scheme that went on from 1998 to 2000. Thomas Steelman was also ordered to pay more than $10 mil back to the Service.
The old guy really worked hard at his craft too:
He took part in promotional meetings, conferences, rallies and telephone conference calls to promote Renaissance’s services and recruit clients, according to prosecutors. Steelman was also a featured speaker on Renaissance’s promotional videotapes.
From the sound of it, this guy Steelman was the Peter Olinto Tim Gearty Rick Duffy of Renaissance, The Tax People, the defunct company he worked for. It disappoints us how the pleasure of serving your country, as crusader for tax compliance, would eventually lead to a life of a scofflaw and tax avoidance. We are truly saddened that there continues to be very few true tax heroes among us.
Ex-IRS Agent Sentenced to 46 Months for Tax Fraud [Web CPA via TaxProf Blog]