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Wednesday, May 28th, 2008
A former school board president in California was sentenced after pleading guilty to tax evasion.
Dirk Fulton, 53, of Benicia, received five months in prison, five months of home detention, two years of supervised release, and was ordered to pay $115,000 in restitution and a $28,000 fine.
According to prosecutors, Fulton had requested that following his prison and home confinement he be allowed to serve a shorter, one-year period of supervised release. But the judge denied that request, citing letters he received from the community. In particular, one letter writer point out the circumstances of Fulton’s resignation from the school board ultimately led to an expensive special election for taxpayers.
Additionally, in his sentencing papers, Fulton cited his public service on the Benicia City Council and as president of the school board. Responded U.S. Atty. McGregor W. Scott: “Dirk Fulton was in a position to know that public institutions cannot function unless people pay their taxes. He did not do his duty. He lied to his government and kept money to which he was not entitled.”
Tags: Back Taxes, delinquent taxes, tax evasion
Posted in IRS Tax Cases, IRS Times and Inquirer | No Comments »
Friday, April 25th, 2008
The star of over 50 films including the “Blade” vampire trilogy has recently found himself playing a different role—the defendant in the most prominent tax prosecution in decades (since billionaire hotelier Leona Helmsley was convicted of tax fraud in 1989).
Wesley Snipes was sentenced to three years in prison yesterday for willfully failing to file tax returns. While he had argued for leniency, federal prosecutors sought the maximum penalty possible. In addition to his prison sentence, Snipes must pay up to $17 million in back taxes plus penalties and interest.
According to the New York Times, Snipes had reportedly earned at least $103 million since 1993 but he quit paying taxes in 1998 and sought a $7 million refund for taxes he paid in 1997. The interesting thing is that Snipes did not try to hide his non-payment. The actor apparently considered himself a “nontaxpayer” and even wrote the I.R.S. to notify them of this.
Snipes is by far the most prominent person in a small current of individuals and small business owners who have rejected the 16th Amendment, which in 1913 authorized the income tax. Asserting that the amendment was fraudulently adopted, these nontaxpayers argue that federal law does not apply to them and have stopped withholding taxes and paying the government. The Courts have rejected many of these assertions.
What’s next for Snipes? His legal team said they would appeal and are hoping for a complete acquittal.
Tags: 16th amendment, delinquent tax returns, failing to file tax returns, tax evasion, wesley snipes, Wesley snipes tax evasion, withholding taxes
Posted in IRS Tax Cases, Unfiled Returns - Delinquent Tax Returns | 3 Comments »
Sunday, April 13th, 2008
Here’s a new one: A high-speed pursuit leads the IRS to a tax fraud case and a guilty plea.
According to Asst. U.S. Attys. Anne Pings and Jill Thomas, Olivia K. McCormick, 47, of Sacramento, Calif., was originally arrested in May 2006 after her boyfriend, Michael Slaton, fled from officers of the Sacramento Police Department who had arrived at McCormick’s residence to execute a search warrant.
After leading the police on a high-speed vehicle chase, Slaton crashed his own car and eventually was running from the police on foot, dropping large quantities of crack cocaine as he ran. The officers found more crack cocaine in McCormick’s house. Slaton was sentenced in February to 18 years in prison.
At the time of that arrest, Slaton had just been out of federal prison a short time after having been arrested in 1993 and sentenced to serve 14 years in federal prison. After the arrest of Slaton, federal authorities learned that while Slaton was in prison serving that 14-year sentence, McCormick had been declaring him on tax returns from 2001 to 2003 as a dependent in order to reduce her taxes. She falsely identified Slaton as her “nephew” instead of her boyfriend. During that time, McCormick was not providing any support for Slaton. Instead, during that time all of Slaton’s shelter, clothing, food, medical care and other support were being provided by the United States Bureau of Prisons.
Tags: filing false federal tax return
Posted in IRS Times and Inquirer | No Comments »
Tuesday, April 8th, 2008
A San Francisco woman was sentenced to 20 months in prison, to be followed by three years of supervised release, for her involvement in an embezzlement scheme and for filing a false tax return.
Suzie Moy Yuen, 53, of San Francisco, Calif., pleaded guilty to mail fraud and willfully subscribing to a false tax return. According to the plea agreement, Yuen served as an executive assistant to an individual for over ten years. The victim, who is now 99 years old, had given Yuen signature authority over two of his checking accounts. From 1999 and 2003, Yuen fraudulently used the victim’s checking accounts to pay her own bills and made false entries in the general ledger to conceal her fraud. Yuen admitted to embezzling more than $1.4 million.
Yuen also admitted that she failed to include in her tax returns the income she had embezzled from her employer.
In particular, Yuen omitted from her 1999 return about $127,000 she had stolen from the victim during that year. Yuen similarly failed to report her embezzled proceeds for each of calendar years 2000 through 2003, resulting in a total of approximately $1.4 million in fraudulent income. In all, Yuen owed the IRS, excluding interest and penalties, a total of $492,646.
Tags: filing false federal tax return
Posted in IRS Tax Cases, IRS Times and Inquirer | No Comments »
Wednesday, April 2nd, 2008
A California chiropractor has been sentenced to two years in federal prison and ordered to pay $1.16 million in restitution for tax evasion.
Ramon Reynoso, 45, of Castro Valley, Calif., pleaded guilty to one count of tax evasion. According to the plea agreement, Mr. Reynoso admitted that from 1991 to 2004, he was self-employed at his chiropractic business in Hayward, Calif. He agreed that his taxable income for services from 2000 to 2003 was $3.18 million and the tax due and owing on that income was $1.16 million.
Reynoso admitted that he had last filed his personal federal income taxes for the calendar year 1996, and despite earning a significant income during the calendar year 2001, he willfully failed to file his federal income taxes and took a number of affirmative acts to willfully attempt to evade and defeat this income tax due and owing to the United States, including placing assets in nominee accounts, using the Zeus Trust to conceal his receipt of income, and opening bank accounts with false Social Security numbers.
Posted in IRS Tax Cases, IRS Times and Inquirer, Unfiled Returns - Delinquent Tax Returns | No Comments »
Tuesday, March 18th, 2008
Two Lynn, Mass., women and a man were sentenced in federal court for their roles in a conspiracy and scheme to file false federal tax returns to obtain fraudulent tax refunds. Esther Arias, 30, Esther Percel, 48, and Edwin Gonzalez, 35, were sentenced to prison terms.
Arias was sentenced to 60 months in prison, to be followed by three years of supervised release, with an order of restitution to federal and state tax authorities in the amount of $70,148. Percel (mother of Arias) was sentenced to serve 36 months in prison, followed by three years of supervised release, with an order to pay $69,592 in restitution. Gonzalez (former boyfriend of Arias) was sentenced to 42 months in prison, to be followed by three years of supervised release, with an order of restitution in the amount of $64,664.
Percel pleaded guilty, while Arias and Gonzalez were convicted after an eight-day trial. The evidence presented at the change-of-plea hearing and at the jury trial proved that from February 1999 to April 2004, the defendants participated in a scheme to use stolen identities to file more than 45 fraudulent tax returns in the names of other individuals. Arias, Percel and Gonzalez illegally claimed more than $200,000 in federal and state tax refunds, from which they received more than $130,000 in refund checks before the scheme ended.
Tags: false federal income tax return
Posted in IRS Tax Cases, IRS Times and Inquirer | No Comments »
Thursday, March 13th, 2008
Roger Lexin Mai was sentenced to two years in prison, to be followed by three years of supervised release, and ordered to pay restitution of $57,481 for presenting false claims to the IRS.
Mr. Mai, 33, of San Francisco, pleaded guilty to 17 counts of filing false claims. In pleading guilty, Mai admitted that from January to April 2003, he filed 17 false tax returns with the IRS. He purchased names and Social Security numbers through the Web site Craigslist for $20 per identity. He created false Wage and Tax Statements, Forms W-2, using the identities he purchased. He then created false U.S. Individual Income Tax Returns, which he filed electronically, claiming tax refunds of $107,049. The individuals to whom the identities belong did not authorize the sale or use of their identities.
Mr. Mai further admitted that in addition to the 17 false returns, to which he pleaded guilty, he electronically filed an additional 125 false Forms 1040 and Forms W-2, claiming refunds totaling $734,448.
Tags: false federal income tax return
Posted in IRS Tax Cases, IRS Times and Inquirer | No Comments »
Tuesday, March 11th, 2008
Charlene L. Saucier, 37, of Sacramento, Calif., was sentenced to 18 months in prison for her role in a scheme to submit fraudulent tax returns to the IRS seeking refunds. Saucier was also ordered to pay $2,273 in restitution to the IRS.
Saucier’s former husband, Tavoris Timane Saucier, 28, of North Highlands, Calif., was previously sentenced to five months in prison and three years of supervised release in connection with the same scheme.
According to Asst. U.S. Attys. Camil A. Skipper and Benjamin B. Wagner, Charlene Saucier admitted in her guilty plea that, in 2004 and 2005, the Sauciers recruited individuals willing to submit fraudulent tax returns to the IRS and that she prepared tax returns for at least two such individuals using false income and dependent information so that they appeared to qualify for refunds under the Earned Income Credit (EIC) provisions of the tax code. She and her former husband had agreed to split with those individuals any refunds issued by the IRS as a result of the false claims.
In 2000, Charlene Saucier pleaded guilty in Sacramento federal court to a nearly identical phony tax return scheme in which she admitted to preparing false tax returns seeking EIC refunds. She served a one-year sentence in that case.
Tags: false federal income tax returns
Posted in IRS Tax Cases, IRS Times and Inquirer | No Comments »
Thursday, March 6th, 2008
The owner of a large construction management company has been sentenced to 10 years in prison after underpaying his company’s payroll taxes by nearly $3 million over a 10-year period.
Lucky Mata, 47, of West Palm Beach, Fla., and owner of Kodiak Construction and Management, was convicted of multiple charges relating to his evasion of federal payroll taxes. Kodiak underpaid its federal payroll taxes by nearly $3 million between 1994 and 2005, during which time it paid its workers nearly $18 million in cash payments.
Check cashers posing as subcontractors helped Mata perpetrate the scheme. Mata caused the check cashers to lie to banks about the final destination of the cash after it left the bank, and then caused multiple false federal payroll tax returns to be filed with the IRS. The total scheme involved more than $18 million in Kodiak wages over a ten-year period.
Tags: , IRS Cases, Kodiak Construction
Posted in IRS Tax Cases, IRS Times and Inquirer | No Comments »
Tuesday, February 5th, 2008
After pleading guilty to failing to pay payroll taxes, Bruce Alexander Brown, the former owner of employee-leasing business Excell Personnel, was sentenced to 36 months in prison and ordered to pay $4.2 million in restitution to the IRS.
Brown, a Dallas resident, did not pay federal payroll taxes for Excell in 2001 and 2002. According to court documents, Brown’s company “leased” employees to companies that did not want to hire their own workers. Excell would locate, hire and train the employees, and then provide them to businesses that were Excell’s customers. The businesses would pay Brown, who in turn would pay the employees.
Brown admitted that he was aware of the legal obligations to pay over to the IRS the required withholding taxes, Social Security taxes and Medicare taxes. He simply chose not to pay the taxes.
Tags: Bruce Alexander Brown, Excell Personnel
Posted in IRS Tax Cases, IRS Times and Inquirer | No Comments »
Friday, February 1st, 2008
Roy A. Ottinger II, 48, of Phoenix, Arz., was sentenced to 18 months in federal prison after being charged in an information to two counts of failing to file income tax returns. Ottinger was also ordered to cooperate with the IRS in order to come into compliance.
Ottinger was a licensed chiropractor in the state of Arizona, conducting his chiropractic practice in Apache Junction through Optima Multi-Care PLC, a Limited Liability Company that Ottinger incorporated in 1999. In 2001 and 2002, Ottinger earned a gross income from his practice of $1,110,263 and $826,309, respectively. Ottinger also earned rental income of $51,466 in 2001 and $59,807 in 2002 generated from numerous properties he owned.
Claiming his income was excluded from taxation based on the U.S. Constitution, Ottinger did not file a correct tax return between 1992 and 2005. In 1994 Ottinger’s accountant advised him that his anti-tax views he were incorrect and invalid.
Beginning as early as 1998, the IRS initiated examinations on Ottinger for his 1994, 1995 and 1997 tax return delinquencies. Ottinger responded to the IRS with letters espousing his anti-tax views and filed tax returns reflecting zero income for the years 1994, 1995 and 1997.
Tags: failing to file income tax returns, Roy A. Ottinger II
Posted in IRS Tax Cases, IRS Times and Inquirer | No Comments »
Monday, January 7th, 2008
As 2007 comes to an end, it’s a good time to consider whether you need to turn your tax life around. Are you cheating? Could you be facing jail time?
Ken Jenne was once one of the most powerful politicians in Florida.
An influential Democrat, Jenne was a longtime commissioner in Broward County, a former state senator, and sheriff of the Fort Lauderdale-based Broward County Sheriff’s Office.
But Jenne experienced a hard fall from grace: This year, federal authorities indicted Jenne for mail fraud and tax evasion for a scheme to enrich himself by obtaining money from two vendors who were doing business with the Broward County Sheriff’s Office.
After pleading guilty to the charge, Jenne will spend the next year behind bars.
In the end, tax charges took down the powerful politician and lawman.
Another powerful man, former New York City police commissioner Bernard B. Kerik, a protégé of presidential candidate Rudolph W. Giuliani, also faces tax charges.
It’s no secret: The Internal Revenue Service and U.S. Attorney’s Office are particularly aggressive in prosecuting tax violators.
As the year comes to end, perhaps you should be asking yourself two questions: Am I cheating on taxes? Will I be next?
And remember, the powerful are not the only targets of tax investigations and prosecutions.
Consider:
• Robert Frank Hanna, the owner and operator of Newport Tux and Uniform in Newport Beach, Calif., pleaded guilty to evading the payment of his federal taxes. He owed the IRS $356,459.
• Leroy Albert Lewis, a doctor in Danville, Calif., pleaded guilty to concealing $900,000 in income in offshore banks as a way to evade taxes.
• Nuclear engineer Mark M. Kaushansky, 56, of Monroeville, Penn., received 15 months in prison and was fined $20,000 after pleading guilty to eight counts of personal and corporate tax
evasion, resulting in a tax loss of $63,000.
• Snezana Berbic, 39, of Wethersfield, Conn., was sentenced to 12 months and one day of in prison after she pleaded guilty to one count of making a false statement on a federal individual income tax return and one count of assisting another person in the preparation of a false federal individual income tax return.
Enforcement is up. Prosecutions are up. Jail time is up.
The government has been aggressively cracking down for several years on tax crimes and will continue to prosecute those taxpayers who are devising ways to avoid their obligations to Uncle Sam.
If you are engaging in illegal behavior — underreporting your income, using trusts, sending money to offshore accounts — you could be next on the list. Happy New Year!
About the Author:
Michael Rozbruch is a Certified Tax Resolution Specialist, a member of the American Society of IRS Problem Solvers and a Maryland CPA. You can contact him at 866-IRS-PROBLEMS to obtain a free subscription to his newsletter titled The IRS Times & Inquirer.
Tags: tax help, tax resolution, taxpayers
Posted in IRS Times and Inquirer | No Comments »
Friday, January 4th, 2008
After admitting to defrauded the Rhode Island School of Design out of nearly $1 million in a fraudulent billing scheme, Patrick Clyne was sentenced to 27 months in months in prison for mail and tax fraud.
Clyne, who was fire safety manager for RISD, set up a shell company that billed RISD for work that was never performed. Clyne admitted to filing a false income tax return for 2003, conceding a total tax loss to the government of $162,743 between 2001 and 2005. As a condition of supervised release when he finishes his prison term, Clyne must file accurate income tax returns and pay all due taxes, plus interest and penalties.
Tags: mail and tax fraud, tax fraud
Posted in IRS Tax Cases, IRS Times and Inquirer | No Comments »
Thursday, January 3rd, 2008
Attorney Joseph Richichi, 61, of Stamford, Conn., was sentenced to 16 months in prison for tax evasion. According to court records, Richichi evaded paying taxes on more than $1.8 million he earned from 2000 to 2005. Richichi admitted that he failed to pay more than $600,000 in taxes that were due for those tax years. He has paid full restitution of $614,231 to the IRS and an additional $763,076.37 in civil fraud penalties and interest.
Tags: attorney evaded taxes, tax evasion
Posted in IRS Tax Cases, IRS Times and Inquirer | No Comments »
Wednesday, January 2nd, 2008
A former U.S. Forest Service employee has been sentenced to 21 months in prison for embezzlement and tax fraud charges.
Debra Kay Durfey, 50, of Echo, Ore., previously pleaded guilty in June to single counts of embezzlement and theft of public money or property and preparing a false tax document. She was also ordered to pay $642,319 in restitution to the U. S. Forest Service.
In Durfey’s plea, she admitted she stole money from the Forest Service’s account by depositing the Forest Service checks into her personal account. She then used the money to gamble, shop and make payments on her car and mortgage. After Durfey’s embezzlement was discovered, she admitted to federal agents that she knowingly embezzled the funds and knew it was wrong.
Durfey also caused a false Form 1099 to be filed with the IRS on behalf of Hollinger, attributing around $137,000 of the embezzled funds to him in an attempt to hide her embezzlement.
Tags: preparing a false tax document, tax fraud charges
Posted in IRS Tax Cases, IRS Times and Inquirer | No Comments »
