Coming up roses; gettin’ out of Dodge; extra-judicial income; and other highlights of recent tax cases.
Rosedale, Maryland: Preparer Jonathan Hebb, 43, has pleaded guilty to two counts of filing a false income tax return.
From January 2013 through March 2017, Hebb prepared and filed state income tax returns, for a fee, for numerous Maryland residents; he was employed at Tax Care Financial Services.
Many of the returns Hebb filed included false information to fraudulently minimize the taxpayers’ liabilities and inflate refunds. Based on the false returns, Hebb’s clients received refunds totaling approximately $89,633.
Hebb faced imprisonment for up to 10 years on each count. He was sentenced to five years’ incarceration, suspended, and five years of supervised probation. Hebb was also ordered to pay $89,633 in restitution to the State of Maryland. He is also prohibited from acting as a preparer.
Roseville, Minnesota: Construction company owner Randal Scot Brinkman, 60, has been found guilty on six counts of tax evasion.
From 2002 through 2018, Brinkman took steps to hide his income and to actively evade the assessment of taxes, including using sham businesses, closing his personal bank accounts, using money orders and cash to pay for daily expenses, and creating a fake religious organization.
Following a 2007 IRS audit, Brinkman filed personal income tax returns for 2002 through 2007, admitting that he owed more than $145,000 in federal income taxes for those years. Despite filing the returns, he didn’t pay any of the federal taxes he admitted he owed. Brinkman also failed to file returns or pay any of his federal income taxes from 2012 through 2018.
Fort Mill, South Carolina: Nickolas M. Godfrey, 41, has been sentenced to 37 months in prison for securities fraud, wire fraud and transactional money laundering in connection with a $1 million investment fraud scheme and a related tax evasion.
From 2012 to at least 2015, Godfrey obtained more than $1 million by engaging in a Ponzi scheme through his company, Coast to Coast Business Funding, which purportedly provided short-term cash advances to businesses. Godfrey induced at least 20 victims to invest with Coast to Coast by falsely representing that the company was successfully generating substantial revenue and promising returns of more than 73 percent.
Godfrey used victims’ money to pay for personal expenses and for the expenses of his other businesses and to make Ponzi-type payments to earlier victims. When victims complained about missed payments and demanded more information, Godfrey tried to appease them by creating fake financial statements for Coast to Coast and a fake list of clients to which Coast to Coast had purportedly provided financing.
Godfrey also evaded federal tax liabilities related to his two hair salons, Bliss Day Spa Salon in Pineville, North Carolina, and Alter Ego Salon Day Spa in Charlotte. Godfrey committed tax evasion by, among other things, failing to pay federal employment taxes he had withheld from employees at Bliss and Alter Ego and taking multiple steps to thwart IRS collection efforts. In addition, Godfrey filed individual U.S. income returns for 2009 through 2012 that failed to accurately report net income from his businesses.
Godfrey was also ordered to serve two years under court supervision and pay restitution of more than $1.6 million.
Yorktown Heights, New York: Preparer Steve Sabba, 61, and his company, Tax Pro Financial Network, have been sentenced to five years of probation on multiple charges of criminal tax fraud, news outlets said.
Sabba reportedly defrauded the state from February 2012 through March 2018. He sold a prep business in 2009 and subsequently failed to report the income from the sale in the following years, according to reports.
Sabba reportedly was previously convicted of tax fraud in 2009, when he pleaded guilty to filing a false state personal return.
He has been sentenced to five years of probation, during which he will be monitored by an authorized tax professional in the preparation of returns, news outlets said, adding that he’s also made restitution of $25,270 to the IRS.
Moline, Illinois: Preparer Serge Cibuyi, 49, a naturalized U.S. citizen originally from the Democratic Republic of the Congo who filed fraudulent returns for his clients, has been sentenced to a year and a day in prison.
While living in Cedar Rapids, Iowa, Cibuyi received an online certificate in tax preparation, and he admitted that he prepared fraudulent returns by claiming false deductions and credits or by inflating legitimate deductions and credits. Cibuyi paid individuals to allow him to use their dependents on other taxpayers’ returns to boost refunds. Between 2014 and 2015, Cibuyi prepared and filed at least 36 false returns, with a tax loss to the U.S. of more than $100,000.
Cibuyi was sentenced to a year of supervised release after the prison term.
Dodge City, Kansas: Preparer Maria R. Garcia, 48, has pleaded guilty to one count of preparing returns containing false statements.
She admitted preparing numerous returns for tax years 2013, 2014 and 2015 that contained false statements. As a result, her clients received refunds in excess of what they were owed, with the loss to the U.S. exceeding $101,700.
The plea agreement calls for Garcia to pay the full amount in restitution and to be permanently prohibited from working as a preparer. Sentencing is Oct. 15, when she faces up to three years in prison and a fine up to $100,000.
Beltsville, Maryland: Oluwaseyi Akapo, 51, has been sentenced to five years, all suspended, and three years of supervised probation after pleading guilty to two counts of filing a false income tax return.
Akapo, who was not a registered preparer in Maryland, prepared and filed state income tax returns for a fee on behalf of numerous residents. Akapo was also employed part-time at TaxPoint Solutions Accountants in Upper Marlboro, Maryland. Many of the state returns Akapo filed included false information to reduce clients’ Maryland taxes and inflate their refunds.
Conditions of the probation include 50 hours’ community service and restitution of $15,000, which Akapo paid. He is also prohibited from acting as a tax preparer.
Wheeling, West Virginia: Former Ohio County magistrate Harry A. Radcliffe III, 61, has been sentenced to four months of incarceration, to be followed by two months of home confinement, for tax fraud.
In tax years 2013 through 2015, Radcliffe accepted some $22,000 in cash bribes from William Seelbach, then-owner of WS Bail Bonding, d.b.a. A Bail Bonding by ABC (“ABC”). Radcliffe failed to report this income to the IRS, resulting in a tax loss of $5,500. He also failed to report this extra-judicial income to the Supreme Court of Appeals of West Virginia.
Radcliffe was ordered to pay $5,500 in restitution to the IRS. Seelbach was sentenced to three years of probation.
Pittsford, New York: Dr. Xingjia Cui, 56, who was previously convicted of health care and tax fraud, has been sentenced to a year and a day in prison and ordered to pay $597,823 in restitution.
Cui was employed full-time by the Canandaigua Veterans Administration Medical Center and had a private psychiatric practice. Investigation showed that Cui defrauded health insurance benefit programs of some $79,275 by fraudulently billing for psychotherapy services he did not provide.
For tax years 2010 through 2014, Cui also failed to report some $381,447 in income, resulting in a tax loss to the U.S. Treasury of approximately $132,704.