Stolen names and SSNs; ‘substantial’ fees in a $1.1 million scheme; Canadian conspiracy; and other highlights of recent tax cases.
Allentown, Pa.: Preparer Jessenia E. Cordero, 37, has been sentenced to 42 months in prison for conspiring to file tax returns using stolen identities.
According to the indictment and information presented to the court, Cordero operated MJ Associates and Express Tax Services, which provided tax prep, check cashing and other services. Cordero and her co-conspirators obtained lists of Puerto Rico residents’ names and Social Security numbers and used these IDs to file fraudulent federal returns seeking refunds.
The conspirators directed the IRS to mail the refund checks to addresses they controlled or to deposit the refunds onto pre-paid debit cards. Cordero used her businesses to cash fraudulently obtained refund checks totaling approximately $4,316,103.
Cordero was also ordered to serve three years of supervised release and to pay $3,960,070.50 restitution to the IRS.
Hammond, La.: Preparer Rojonah Harris, 35, has pleaded guilty to aiding and abetting in the preparation of false tax returns.
According to court documents, beginning in about 2012 Harris owned and operated the prep business Harris Finance and Tax Service. Investigation revealed that she regularly claimed false deductions and claimed false federal withholdings for her clients to inflate undeserved refunds.
In many cases, Harris created false W-2s for her clients that artificially and erroneously misstated the income the client had earned, including by overstating, understating or fabricating income. Harris also knowingly overstated federal income tax on W-2s that had been withheld from their income.
To increase clients’ refunds, Harris included false wages in the form of household help income to which her clients were not entitled and provided no supporting documentation. She also reported qualified educational expenses when, as Harris knew, the clients had neither educational expenses nor documentation indicating expenses.
Harris charged “substantial” fees, earning not less than $582,090 in prep fees for preparing returns for tax years 2011 through 2013.
Between tax years 2011 and 2014 Harris prepared and filed some 267 false and fraudulent returns, resulting in inappropriate and unnecessary refunds of not less than approximately $1,115,578.
As part of her plea, Harris acknowledged a loss to the IRS of not less than $1,115,578, agreeing to repay at least that amount in restitution. She faces a maximum of not more than three years in prison, followed by up to a year of supervised release, and a $100,000 fine. Sentencing is Sept. 21.
Pittsburg, Calif.: Police officer Gary Bostick, 39, has pleaded guilty to conspiracy to commit theft of government money and wire fraud.
According to court documents, while employed as a police officer Bostick participated in a conspiracy to cash stolen U.S. Treasury checks and file returns in the names of deceased individuals to obtain fraudulent refunds. Bostick filed some of the fraudulent returns from his residence and he and his co-conspirators directed the refund checks to addresses they could access.
Bostick and his co-conspirators also acquired stolen tax refund and Social Security checks, which they cashed at stores in various areas. Bostick recruited and directed others who participated in the scheme, and admitted to causing a tax loss of more than $720,530.
Sentencing is Sept. 19, when Bostick faces a maximum of five years in prison for the conspiracy count and 20 years in prison for the wire fraud count. He also faces a period of supervised release, restitution and monetary penalties.
Rochester, N.Y.: Timothy Johnston, 36, of Calgary, Alberta, has pleaded guilty in to conspiring to defraud the United States and commit theft of government funds.
According to documents filed with the court, Johnston and other Canadian citizens participated in a scheme to file fraudulent refund claims with the IRS. In March 2009, Johnston filed a fraudulent nonresident alien income tax return seeking a refund of $642,947.26. On this return, he falsely claimed that the requested refund represented the amount that had been withheld and paid to the IRS on his behalf.
After the IRS issued the refund to Johnston, he entered the U.S. and opened a bank account in Rochester to deposit the fraudulently obtained check. Between August 2009 and December 2011, he caused funds to be transferred from this account to a bank account in Canada and accounts in the U.S. in the names of his co-conspirators.
Johnston is the third Canadian citizen convicted for this scheme. Sentencing is Sept. 12, when he faces a maximum of five years in prison, a period of supervised release and monetary penalties. He also agreed to pay $642,947.26 restitution to the IRS.
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