Theft from prep help; neither snow nor rain nor the law; and other highlights of recent tax cases.
Lawrence, Mass.: Former preparer Rafael Huertas Jr., 32, has pleaded guilty to fraud, and money laundering in connection with stealing thousands of dollars in state income tax refunds for himself and others by filing false returns.
Huertas pleaded guilty to six counts of presenting a false claim upon a public agency, six counts of delivering a fraudulent document, two counts of willfully assisting in preparation of a fraudulent return and single counts of willful failure to file a tax return, ID fraud and money laundering.
The charges stem from actions Huertas undertook between 2011 and 2014, including a period between 2012 and 2013, when he worked for a tax prep service in Lowell, Mass. Authorities were prepared to claim that Huertas forged or falsified information on his own returns for 2010, 2011, 2012 and 2013 to inflate his refunds; they were also prepared to prove that while working for a prep service Huertas used the personal information of one prior client to open a bank account and file a fraudulent return to obtain an additional refund without the client’s knowledge or consent, among other illegal activity.
Huertas was sentenced to six months in jail to be followed by five years of probation, and was also ordered to pay $9,750 restitution.
Columbus, Ga.: Postal worker Harold Coley, 52, has been found guilty for his role in a stolen-ID refund fraud.
According to evidence, Coley worked as a mail carrier for the U.S. Postal Service and in 2012 was recruited by Keshia Lanier to collect addresses on his route, including many that did not exist or were related to vacant buildings, and provide them to Lanier and others to file fraudulent federal returns.
Lanier obtained many of the stolen IDs from Tamika Floyd, who worked for the Alabama Department of Public Health. The stolen identities primarily belonged to 16- and 17 year-olds. Lanier and others directed the IRS to mail the refund checks to the addresses Coley provided. In exchange for cash, Coley intercepted the fraudulently obtained checks and provided them to Lanier and others.
Coley’s co-conspirators directed over 1,600 refund checks claiming more than $2.5 million to addresses on his postal route.
His sentencing is Dec. 19, when he faces a maximum of 10 years in prison for the conspiracy count, 20 years for each count of mail fraud and five years for each count of embezzlement of the mail. Coley also faces a period of supervised release, restitution, forfeiture and monetary penalties. Lanier and Floyd were previously sentenced for their roles in the scheme.
Boston: CPA James Carey, 50, former owner of a forensic accounting firm, has pleaded guilty to understating his income by hundreds of thousands of dollars on his personal income tax returns.
Carey owned Carey & Co. in Boston, which administered bank accounts on behalf of insurance companies into which the insurance companies and their clients could make deposits and from which payments could be made on behalf of and to the insurance companies. In November 2009, a customer of one of the insurance companies sent Carey & Co. a payment of $594,217 intended for the insurance company. During the following months, Carey transferred almost all of that money out of the account and used it for his own purposes.
The money Carey redirected was taxable income, which he failed to report on his personal income tax return. In addition, in 2010, Carey reported less than one-third of the actual income of his business on his personal income tax return.
Carey pleaded guilty to two counts of making material misstatements on his 2009 and 2010 personal income tax returns. The charging statute provides for a sentence of no greater than three years in prison, one year of supervised release, a fine of $250,000 and restitution of unpaid taxes. Sentencing is Nov. 29.
Philadelphia: Four local men have pleaded guilty to conspiring to file fraudulent refund claims.
According to court documents, Ronald LaFortune, 40, Jean Celestin, 35, and Douge Francois, 26, conspired to use stolen IDs to file federal returns fraudulently seeking refunds. LaFortune opened a bank account in the name of “Ronald Tax Service,” though he did not actually have a tax service; he and his co-conspirators directed the IRS to deposit some of the fraudulently obtained tax into this account. He then withdrew money for Celestin, Francois and other co-conspirators.
Celestin and Francois cashed checks they received from LaFortune and kept a portion of the proceeds. Celestin recruited other individuals to join the conspiracy, and he transported cash proceeds from the scheme from Philadelphia to Miami.
The defendants agreed that they caused a tax loss of $118,000.
Sentencing for all three is in December, when each faces a maximum of 10 years in prison, a period of supervised release, restitution and monetary penalties.
In what authorities call a separate but related scheme, Daniel Monville, 28, also conspired with others to use stolen IDs to file federal returns fraudulently seeking refunds. Despite having no tax prep business, Monville opened up a bank account in the name of “Daniel Tax Services” to facilitate the crime. He admitted to causing a tax loss of $155,789.23.
Monville’s sentencing is Dec. 13. He faces a maximum of 10 years in prison on a conspiracy charge and five years in prison for aiding and abetting the filing of fraudulent tax refunds, as well as a period of supervised release, restitution and monetary penalties.
