$3 million in phony refunds; caretaker cares for own coffers; “serial fraud;” and other highlights of recent tax cases.
Murrieta, Calif.: Preparer Patrick Nathaniel McCall, 39, a resident of Las Vegas, has pleaded guilty to a scheme to defraud the Internal Revenue Service of more than $175,000 through the submission of fraudulent federal income tax returns submitted on behalf of his clients.
McCall, who pleaded guilty to two counts of aiding and assisting in the preparation of false income tax returns, admitted that between 2012 and 2014 he knowingly prepared and submitted at least 29 federal income tax returns for clients on which he did not identify himself as the paid tax preparer; attached a Schedule C that falsely claimed a net loss from a business supposedly owned and operated by the client; and falsely claimed a refund.
The tax loss resulting from the filing of these 29 false returns was at least $175,918.
McCall further acknowledged that he prepared approximately 517 other federal income tax returns for clients for the tax years 2011 through 2013 that similarly failed to disclose that he had prepared the returns, included Schedules C on which the client claimed substantial losses from a business and resulted in refunds claimed of approximately $2,998,946.
McCall faces a maximum of six years in prison and a fine of $500,000 when sentenced on May 29. He may also be ordered to pay restitution of at least $175,918 to the IRS.
New York: A Brooklyn preparer identified as Bamgbala has pleaded guilty to 42 counts of an indictment charging him with 18 counts of wire fraud, 22 counts of aggravated ID theft, one count of conspiring to commit aggravated ID theft and one count of aiding and assisting the filing of a false return.
According to court documents, Bamgbala, owner of the prep business Kaybamz Inc., used stolen Social Security numbers to file false federal returns to obtain phony refunds. The superseding indictment also alleges that Bamgbala and others conspired to deposit the unlawfully obtained refund checks into a specified bank account to cash those checks, and created fraudulent IRS forms and New York state identification documents to facilitate the scheme.
Bamgbala faces a minimum of two years in prison for each count of aggravated ID theft, a maximum of 20 years in prison for each count of wire fraud, a maximum of five years in prison for each conspiracy count and a maximum of three years in prison for the aiding and assisting in the filing of a false return count. He also faces a period of supervised release, restitution, forfeiture and monetary penalties.
Hemet, Calif.: Resident Raymond Salazar, 55, has been sentenced to 60 months in prison for his role in a scheme that stole victims’ IDs and used them to claim more than $800,000 in fraudulent refunds.
Three other defendants involved in the scheme have pleaded guilty to federal criminal charges and are awaiting sentencing in March: Charlene Castrejon, 60, of Hemet; Rebecca Mona Sandoval, 35, of San Jacinto, Calif.; and Robert Manuel Gamboa Jr., a.k.a. Paul Timothy Garcia, 31, of Highland, Calif.
As part of their scheme, which continued through April 2015, Salazar and his co-conspirators obtained the names, Social Security numbers and dates of birth of individuals without their knowledge or consent, according to Salazar’s plea agreement. The conspirators then used their IDs to prepare and file false and fraudulent federal income tax returns that contained false income, dependent, Earned Income Tax Credit, Education Credit and Child Tax Credit information, court documents state.
For example, in January 2013 Salazar and his co-defendants used one victim’s ID to knowingly file a return for 2012 that falsely stated the victim’s income and that the victim had a dependent who purportedly was the victim’s disabled nephew, court papers state. The return falsely stated that the ID-theft victim was entitled to an EITC and refund of $3,169, according to Salazar’s plea agreement.
The refund payments were mailed to addresses or deposited directly into taxpayer debit card accounts that Salazar and his co-defendants controlled. The conspirators succeeded in obtaining some $569,334.26 in refunds from the IRS, Salazar’s plea agreement states. In addition, in May 2013 Salazar and his co-defendants knowingly possessed at his Hemet residence at least 15 credit and debit cards and Social Security numbers belonging to their victims and which were intended to be used to file false returns, according to court documents.
Salazar, who pleaded guilty in August to one count of wire fraud and one count of aggravated ID theft, was also ordered to pay $298,693 restitution.
Libby, Mont.: Resident Candace Cummings, 65, has admitted to evading income taxes for two years while she was serving as the financial caretaker for an individual who was unable to care for herself.
Prosecutors said evidence showed that Cummings failed to report income of about $140,188 in 2012, which produced a tax loss of $35,096, and income of about $52,500 in 2013, which produced a tax loss of $13,420.
In late 2011, Cummings agreed to become the financial caretaker for a person who was unable to care for herself; Adult Protective Services assigned a power of attorney to Cummings on the individual’s behalf. APS told Cummings she needed to keep track of receipts for expenses she paid for the individual, and she agreed to serve as a fiduciary without compensation. In 2012 and 2013, Cummings used the individual’s money for personal expenses and failed to report the money as income on her own returns.
In one instance, Cummings sold three of the individual’s savings bonds, worth $24,804. She deposited $10,804 into the individual’s account and bought a cashier’s check in her name for $10,000, which she deposited into her own bank account. Cummings received the remaining $4,000 in cash.
She also sold three more savings bonds, worth $16,408. She received a cashier’s check in her name for $6,000, which she later deposited into her bank account, and the remaining $10,408 in cash.
In 2013, after several suspicious transactions involving the individual’s CDs and savings bonds, the bank contacted APS and local law enforcement. APS revoked Cummings’ power of attorney based on the activity.
She faces a maximum of five years in prison, a $100,000 fine and three years of supervised release. Sentencing is May 16.
Lowell, Mass.: Tax preparer Samuel Dangaiso has been permanently barred from operating a prep business and been ordered to pay $483,000 following allegations that he defrauded clients by filing falsified returns and pocketed inflated refunds.
The Massachusetts Attorney General’s Office sued Dangaiso and his unregistered company Tax Enterprises in 2017 after investigation revealed that Dangaiso was engaged in “serial tax fraud and unfair and deceptive business practices relating to personal income tax returns,” the AG’s office said.
According to the AG’s complaint, Dangaiso filed hundreds of returns containing inaccurate information, including unjustified deductions, false bank account information and fake dependents without the knowledge or consent of his clients. He allegedly used these inaccurate returns to inflate refunds that he directed to his bank account or a prepaid debit card, transferring the amount his client expected as a refund and keeping the remainder for himself.
The complaint alleged that Dangaiso kept at least $150,000 of the funds generated by this scheme.
During the investigation, the AG’s office secured a preliminary injunction barring Dangaiso from continuing to serve as a preparer while the lawsuit was ongoing. In January 2018, Dangaiso admitted to violating this injunction and was ordered by the court to pay $30,000.
The permanent injunction prohibits Dangaiso from preparing and submitting state returns for Massachusetts taxpayers and orders him to pay $483,000. Any state refunds Dangaiso may be eligible to receive in the future will be used to pay back clients he defrauded.
