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Can’t impersonate guilt; Breakthrough busted; married lawyers plead; and other highlights of recent tax cases.
Tampa, Fla.: Brenda Dozier, 54, has pleaded guilty to conspiracy to commit money laundering.
From July through at least November 2015, Dozier laundered money that had been extorted from U.S. residents by conspirators residing in the States and overseas. India-based conspirators extorted money by impersonating IRS officers and misleading multiple victims to believe that they owed money to the IRS and would be arrested and fined if they did not immediately pay alleged back taxes.
As part of the conspiracy, Dozier opened bank accounts, which she used to receive the fraud proceeds, typically via interstate wire transfers.
On Oct. 11, co-conspirators Nishitkumar Patel, Hemalkumar Shah, and Sharvil Patel were charged in a related case with conspiracy to commit wire fraud and extortion, and with individual counts alleging wire fraud, extortion, money laundering, and identity theft.
Dozier faces a maximum of 20 years in prison. She has agreed to pay some $225,000 in restitution to the victims and consented to a forfeiture money judgment in the same amount.
New York: Preparer Rebecca Bayuo, 48, of the Bronx, has been convicted of preparing false returns on behalf of her clients, filing false returns in the names of victims whose IDs she stole and filing false returns on her own behalf.
According to the allegations and evidence, Bayuo owned and operated the tax prep business Breakthrough Insurance Brokerage. From 2010 through 2014, she used stolen ID information of victims to file fraudulent federal income tax returns, which generated bogus refunds. Bayuo repeatedly used the stolen IDs of dozens of victims to file false returns and unlawfully collect federal refunds in their names for herself. As a result of her conduct, many of the victims were unable to file returns and were deprived of refunds.
In addition, from 2011 through 2012 Bayuo prepared and submitted fraudulent federal returns for her clients that resulted in inflated and undeserved refunds. Among other things, she charged her clients an additional fee in exchange for providing them with the stolen IDs of children as false dependents to claim. Bayuo recycled the same stolen IDs as false dependents for numerous returns over at least four years.
Finally, from 2014 to 2015, Bayuo filed false personal income tax returns in her own name, and included in those filings personal ID information belonging to others that she had stolen. On her own tax returns, Bayuo included false dependents, whose IDs she had stolen, to obtain a larger, undeserved refund.
Bayuo was convicted of 12 counts of aiding and assisting in the preparation of false returns, each of which carries a maximum of three years in prison; one count of theft of government funds, which carries a maximum of 10 years in prison; one count of aggravated ID theft, which carries a minimum of two years in prison; and two counts of subscribing to false returns, each of which carries a maximum of three years in prison. Sentencing is April 12.
Philadelphia: Attorneys Edward Millstein and Susan Halpern, who are married, have pleaded guilty to tax offenses.
Millstein and Halpern owed $444,225 in taxes for the calendar years 2007 through 2011. While the IRS was attempting to collect that debt, Millstein hid money in his minor children’s bank accounts to avoid IRS levies. He also lied about obtaining a loan to pay the debt and failed to disclose a bank account that he used to deposit the $300,000 annual salary he earned from a local law firm from 2013 through 2015.
Millstein and Halpern filed their taxes as a married couple filing jointly. They reported an adjusted gross income of $344,350 in 2010 and $394,030 in 2011. The couple paid no money towards their 2010 or 2011 tax debt. By the time the couple was indicted in April 2017, they owed $143,473.35 in taxes for 2010 and $153,560.69 for 2011. At trial, the government was prepared to present testimony that Halpern had spent tens of thousands of dollars on clothing, cosmetics, jewelry, salons, private clubs and trips abroad.
Millstein faces a maximum of five years in prison, three years of supervised release, a $100,000 fine and a $100 special assessment. Halpern faces a maximum of two years in prison, a year of supervised release, a $100,000 fine and $100 special assessment. Sentencing is Feb. 25.
Port St. Lucie, Fla.: Preparer Richard Maurival has been convicted of 10 counts of aiding and assisting in the filing of false income tax returns and three counts of filing false income tax returns.
According to court documents and evidence, from 2012 through 2015 Maurival prepared income tax returns for clients that claimed false education credits, false business expenses and other deductions to inflate federal refunds. Maurival also falsified his own income tax returns by not fully reporting the fees he earned in his prep business for tax years 2012, 2013 and 2014.
Sentencing is Jan. 17, when he faces a maximum of three years in prison on each count, as well as a period of supervised release, restitution and monetary penalties.
New Milford, Conn.: Businessman William F. Anderson, 50, has pleaded guilty in federal court in New Haven to one count of tax evasion.
According to court documents and statements in court, Anderson owns several companies, including W.F. Anderson, a landscaping and excavation business; 1959 LLC; Retaining Wall Solutions; Wil-Rent; and Jacobs Creek Farm. Anderson admitted that he failed to pay more than $1.2 million in federal income taxes for the 2007 through 2014 tax years.
Anderson committed multiple acts of evasion including using business income to purchase cashier’s checks to keep income out of his accounts, conducting structured transactions to avoid filing of CTRs and misrepresenting on a form that was filed with the IRS in May 2015 that he had less than $1,000 in a business checking account when in fact he had written checks for tens of thousands of dollars shortly before the submission of that form.
Sentencing is Jan. 28, when he faces a maximum of five years in prison. Anderson also has agreed to cooperate with the IRS to pay all outstanding taxes, interest and penalties.
Omaha, Nebr.: Mark Harrell, 35, has been sentenced to five years of probation and ordered to pay $43,058 in restitution for one count of aiding and assisting in the preparation of a false return.
For tax year 2012, Harrell prepared returns for friends and family members. On several of the returns were false and fraudulent statements to inflate refunds. The false statements related to wages, wage withholding and claims for the American Opportunity Credit.
Atlanta: Preparers Joseph Racine and Arnouse Merlien have been sentenced to prison for conspiracy to violate the federal income tax laws by purposely misrepresenting to the IRS that their clients were qualified to receive certain tax credits and deductions on their federal returns.
Racine, 38, of Boynton Beach, Fla., received three years and four months in federal prison, to be followed by three years of supervised release. Merlien, 40, also of Boynton Beach, was sentenced to three years in prison to be followed by three years of supervised release. Both were ordered to pay $3,854,915 in restitution to the IRS.
Racine owned JSR Westend Tax Services in Atlanta and JSR Tax Services in Greenacres, Fla. Merlien was the office manager of JSR. Authorities said that in December 2016, IRS investigators identified JSR Westend Tax Services as potentially filing fraudulent returns for tax years 2013 through 2015. Investigation revealed that Racine was filing fraudulent returns involving multiple credits and deductions, including the fuel tax credit, refundable education credit and unreimbursed employee business expenses. Racine requested refunds on almost all of the returns. In March 2017, the IRS determined that JSR in Florida was filing federal returns displaying the same pattern of fraud.
Investigation revealed that Racine and Merlien engaged in this scheme to increase the clients’ prep fees and that the fraud resulted in losses to the U.S. government of more of $3.8 million.