You do the meth; what’s in a name?; snow job; and other highlights of recent tax cases.
Junior achievements
New Bern, North Carolina: Preparer Antoinette Charmane Becton, 40, has pleaded guilty to distribution of methamphetamine and aiding and abetting and conspiracy to defraud the IRS.
Authorities used an informant and an undercover agent to arrange the purchase of one pound of methamphetamine from Becton, who stated that she would reach out to her supplier. Becton and her supplier then met with the informant and agent in a parking lot in Greenville, North Carolina, where the transaction was completed.
Prior to this crime, Becton owned and operated the tax prep business Carolina Tax Services and from 2014 to 2019 conspired to e-file false returns with the IRS. By including false wage income, Becton caused the IRS to issue undeserved federal refunds to clients.
The government said Becton caused the filing of at least 489 false returns, seeking approximately $3.2 million in fraudulent refunds.
She faces five years in prison for the tax charge and five to 40 years for the methamphetamine distribution offense.
Phoenix: Preparer Jana Leigh Meincke has been sentenced to 21 months in prison and ordered to pay $2,211,304 in restitution to the IRS for her role in a fraudulent tax return scheme.
Meincke was involved in a scheme with others to create fake entities for clients. The scheme included the fabrication of expenses, deductions and losses for the fake entities to understate or eliminate a client’s taxable income. Meincke earned commissions and fees based on how much money she and others fraudulently reduced tax liabilities.
In August, conspirator Thomas Rampetsreiter was sentenced to two years in prison.
Meincke, who previously pleaded guilty, did business at times under many names: Scottsdale Tax Solutions, Arizona Tax Tune Up, Lawton Prep Work, RR Tax Prep Group, Just Tax Services, Rapido Choice and Assurance Concierge, among others.
Vallejo, California: Resident Ronda Boone has been sentenced to five years in prison and ordered to pay $1,968,650 in restitution for a multimillion-dollar tax fraud and money laundering conspiracy.
Ronda Boone and her husband and co-defendant, Marty Marciano Boone, filed separate false returns claiming that they were owed millions in federal refunds. While the IRS flagged Ronda Boone’s return as fraudulent and denied her claim, Marty Boone’s false return resulted in the IRS paying him more than $1.9 million in a refund check. The couple then laundered those funds through domestic and foreign accounts, including by establishing a shell corporation in Cyprus and a church in Washington State through which they moved the fraudulently obtained money.
In 2019, a jury found Marty Boone guilty of filing a false tax return, conspiring to commit money laundering and money laundering, and found Ronda Boone guilty of conspiring to commit money laundering and money laundering. Marty Boone was sentenced to seven years and three months in prison.
Tacoma, Washington: Preparer Cleo J. Reed Jr., 51, of Lakewood, Washington, has pleaded guilty to aiding in preparation and presentation of false returns for his multi-year tax prep scheme.
Reed Jr. created Just Us Tax Services and later merged it with Young’s Tax Service. The companies filed returns fraudulently claiming inflated amounts of Earned Income Tax Credits to increase clients’ refunds and the prep fee. Reed Jr. admitted operating the fraud even after his father was sentenced to prison for the same crime.
In 2011 and 2012, even as Reed Jr.’s father’s tax prep business was under investigation for preparing fraudulent returns, Reed Jr. opened and operated Just Us so his father could continue filing returns for clients by filing them in a prep firm with a different name from that of the firm that the IRS was investigating. After opening Just Us, Reed Jr. also started filing fraudulent returns on behalf of some clients, using the fraudulent technique used by his father’s prep business.
In 2013, Cleo Reed Sr. was sentenced to 30 months in prison for his role in the scheme. While he waited to report to prison, Reed Sr. told former clients that he was turning the prep business over to his son because of the criminal investigation and his own failing health.
When the IRS terminated Reed Jr.’s tax prep registration, he had an acquaintance open and register Young’s Tax Service in 2014 and continued filing returns with fraudulent entries for the EITC. Reed Jr. filed the false returns from his home and from Everyday Essentials, the marijuana dispensary he owned and operated.
The total tax loss to which Reed Jr. is admitting criminal liability is $39,899. He has agreed to make restitution to the IRS in that same amount; the IRS may still assess interest and civil tax penalties.
Sentencing is May 10. The charge against Reed Jr. carries up to three years in prison.
Goshen, Indiana: Michael and Laquita Closson, owners of a lawn care and snow-removal business, have been sentenced after each pleading guilty to conspiracy to defraud the U.S. Michael Closson also pleaded guilty to an additional count of tax evasion.
During tax years 2012 through 2016, the couple concealed their income from the IRS by filing false joint income tax returns that underreported their income. The Clossons failed to report more than $2 million dollars in gross receipts, which resulted in them evading more than $600,000 in federal income taxes and almost $300,000 in state income taxes. The Clossons also submitted false Medicaid application forms that allowed them to unlawfully receive nearly $65,000 worth of Medicaid benefits.
The couple owns two homes, a timeshare, more than $10,000 worth of luxury handbags, and four vehicles, including a Lamborghini and a Cadillac Escalade.
The Clossons were also ordered to pay $662,027 in restitution to the IRS, $298,300.75 to the Indiana Department of Revenue and $64,732.39 to Medicaid. Michael Closson was sentenced to prison and Laquita Closson was sentenced to home detention.
Garden Grove, California: Chun Hong Chon, owner of a house-painting and decorating business, has pleaded guilty to a federal criminal charge that he filed false returns, resulting in a loss of more than $600,000 to the U.S.
During 2015 and 2016, Chon used a local check-cashing facility to cash more than $2 million in checks from his clients. Over the same time, Chon reported only $340,751 in gross receipts from his painting company on his individual returns. He admitted that he owes $608,891 in federal income taxes for those years.
Sentencing is May 6, when Chon faces a maximum sentence of three years in prison.
Richmond, Virginia: Preparer Sherry Dudley has been sentenced for aiding and assisting in the preparation of false returns and further ordered to pay restitution to the IRS in the amount of $556,656.
Dudley owned and operated a tax prep business from at least 2014 through 2018 where she prepared or caused to be prepared fraudulent personal income tax returns for clients.
These returns contained falsified information on the Schedules A such as inflated or fictitious deductions for unreimbursed employee expenses and charitable contributions. She also submitted false income tax returns in her own name claiming undeserved Schedule A deductions and tax credits to which she was not entitled.
Dudley pleaded guilty in August.