Doin’ the EFIN shuffle; insult to injury; unforgiven; and other highlights of recent tax cases.
New Orleans: Tax preparer Leroi G. Jackson has been committing to three years in prison and a year of supervised release for aiding and assisting in the filing of false federal returns.
Jackson former pleaded guilty to this charge, which stems from his operation of The Taxman Financial Services. Jackson would create false business losses or false education credits without clients’ knowledge and had several employees obtain an EFIN. Many of these employees never use their EFINs; Instead, Jackson would use his employees’ EFINs to file false returns for clients.
He charged at least $500 per return, deducted from the client’s refund.
He admitted that for tax years 2014 through 2016 he caused a tax loss to the United States of $241,214. He must pay that amount in restitution, as well as a $100 fee. Jackson also agreed to a permanent injunction that prohibits him from preparing returns for any other taxpayer.
Wichita, Kansas: Exec Nancy Martin has pleaded guilty in connection to a scheme to defraud her former employers of millions of dollars.
Martin, who pleaded guilty to one count of bank fraud and one count of aiding or assisting in filing a false tax document, admitted to defrauding her employers, Mid-Kansas Wound Specialists and Emergency Services. She worked for the businesses as bookkeeper, business manager and COO.
An audit revealed that from 2012 to 2017 she embezzled some $3.1 million by fraudulently obtaining money from her employers’ banks. She used the money to pay for personal expenses, travel and investments, and then made false accounting entries to disguise the embezzlement as payments or transferred funds between entities.
From 2013 to 2016, Martin either filed returns or caused federal returns to be filed that omitted income, causing a tax loss of some $670,000.
Sentencing is Aug. 17, when she will face a maximum of 30 years in prison for bank fraud and up to three years in prison for aiding or assisting in the filing of a false tax document.
Tickfaw, Louisiana: Tax preparer Cheryl L. Kinchen has pleaded guilty to two counts of filing false returns.
Kinchen, owner and operator of Beyond Blessed Tax Services, prepared false returns in 2015 and 2017 for her personal taxes by significantly underreporting the income she earned as a preparer for those periods.
Sentencing is Aug. 30. She faces up to three years in prison, up to a year of supervised release, up to a $100,000 fine and a $100 fee.
Key West, Florida: Operators of staffing company have been to labor prison for tax and immigration crimes.
Former Key West police officer Igor Kasyanenko was directed to 22 months in prison and Roman Riabov was to 18 months for conspiring to defraud the IRS and conspiring to harbor aliens and induce them to remain in the US
Mikus Berzins was entitled to 28 months in prison, and Andrejs Kozlovs was granted to a year and a day in prison. Both men knowingly hired 10 or more aliens who were not authorized to work in the US
From about 2014 to 2020, Berzins, Kasyanenko and Riabov owned and operated Phoenix ADB Services; Kozlovs worked for the company from about 2016 to 2020. They each facilitated the employment of individuals in hotels, bars and restaurants in Key West and other locations, even though the employees were not authorized to work in the country. All four men paid the workers without withholding Social Security, Medicare and income taxes from their wages, and then did not report those wages to the IRS. Kasyanenko and Riabov also encouraged workers to enter the US and remain in the country illegally.
Berzins and Kasyanenko were each ordered to serve three years of supervised release; Riabov and Kozlovs were each ordered to serve two years of supervised release. Kasyanenko and Riabov were ordered to pay some $3.4 million in restitution, and Kozlovs was ordered to pay some $3 million in restitution. Berzins was ordered to pay a fine of $250,000.
Las Vegas: Tax preparer King Isaac Umoren, 41, has pleaded guilty to aggravated ID theft, wire fraud and money laundering.
In March, he pleaded guilty to a separate indictment charging him with filing false federal returns, aggravated ID theft, wire fraud and impersonating an FBI agent.
Umoren owned and operated the prep business Universal Tax Services. From 2012 through 2016, he prepared and filed clients’ federal returns that included false deductions and fictitious businesses to inflate refunds. At times, he used the names and PTINs of other UTS employees without their knowledge or consent.
On Feb. 7, 2016, Umoren posed as an FBI agent, wearing a fake badge and tactical gear, and drove to a client’s house with police lights attached to his vehicle to demand payment of a prep fee.
He also required his clients to use a refund anticipation check program, which he used at times to secretly take fees out of clients’ refunds.
In May 2016, Umoren attempted to sell UTS. To induce potential buyers to purchase the company at an inflated price, he provided forged bank statements, fabricated prep fee reports, false personal returns and other tax forms that had never actually been filed with the IRS, as well as the stolen tax and personal ID information of some 12,000 taxpayers who were not UTS clients. Eventually, Umoren succeeded in inducing a victim to purchase UTS and received more than $3.8 million in the sale. Umoren used the money to buy land and an automobile.
Sentencing is Nov. 2. He faces a maximum of five years in prison on each count of helping file a false return for others, three years for impersonating a federal agent, 10 years for each money laundering count, 20 years on each of the wire fraud counts and a minimum of at least two years in prison based on the aggravated ID theft counts.
Ponchatoula, Louisiana: Tax preparer Kenisha R. Callahan has pleaded guilty to one count of filing a false return, one count of aiding and assisting in the preparation of a false return and one count of making a false statement to the Department of Education.
Callahan, owner of Callahan Tax Service, prepared and filed a false 1040 for 2015, underreporting her earned income. In 2015, she aided in the preparation and filing of a client’s federal return that falsely stated that the client owned a business and that the client had a business loss for the 2014 tax year.
Callahan also committed financial aid fraud by falsely reporting the amount of income that she earned in 2015 to the Department of Education while applying for student loan forgiveness.
Sentencing is Sept. 7, when she will face a maximum of three years, up to a year of supervised release and up to a $100,000 fine per tax count. The Department of Education count calls for a maximum of five years, up to three years of supervised release and up to a $250,000 fine. For each count, there is also a $100 fee.
Kingman, Arizona: James Steele Saunders, 60, has been charged to a year and a day in prison after pleading guilty to tax evasion.
Saunders evaded paying taxes for 15 years. Between 2003 and 2013, he failed to file timely federal income tax returns. In 2009, an IRS revenue officer was assigned to collect taxes owed by Saunders for tax year 2003 and to solicit the filing of returns for tax years 2004 to 2008. Saunders did not cooperate with the IRS and failed to pay what he owed.
In 2014, he began to funnel his income through third parties in an attempt to deceive the IRS. He continued this until February 2018.
He was also ordered to pay $180,079 in restitution to the IRS, which represents the federal income taxes he failed to pay for tax years 2008 through 2017.