A senate hearing; lack of Unity; that ain't chicken feed; and other highlights of recent tax cases.
Fitchburg, Massachusetts: Former state senator Dean A. Tran has been convicted for scheming to defraud the Massachusetts Department of Unemployment Assistance and collecting income that he failed to report to the Internal Revenue Service.
Tran, convicted of 20 counts of wire fraud and three counts of filing false returns, was a member of the Massachusetts State Senate from 2017 to January 2021. After his term, he fraudulently received pandemic unemployment benefits while employed as a paid consultant for a New Hampshire-based retailer of automotive parts; he fraudulently collected $30,120 in pandemic unemployment benefits.
He also concealed $54,700 in consulting income from the automotive company on his 2021 federal income tax return. This was in addition to thousands of dollars in income that he concealed from the IRS while collecting rent from tenants who rented his Fitchburg property from 2020 to 2022.
The charge of wire fraud provides for a sentence of up to 20 years in prison, three years of supervised release and a fine of $250,000. The charge of filing false tax returns provides for a sentence of up to three years in prison, a year of supervised release and a fine of $100,000. Sentencing is Dec. 4.
Joliet, Illinois: A federal court has permanently enjoined tax preparer Sir Michael Joseph Davenport and his company My Unity Tax Financial & Tax Preparation from preparing federal returns for others and from owning or operating any tax prep businesses.
Davenport agreed to the permanent injunction.
The complaint alleges that he and his company prepared false and fraudulent federal returns to improperly reduce clients' tax liabilities or to obtain undeserved refunds. The complaint alleges that Davenport and My Unity routinely prepared returns for customers reporting fictitious businesses, minimal or no income, and large fabricated or manipulated expenses to fraudulently reduce taxable income. As alleged in the complaint, most of these businesses did not exist.
The complaint also alleges that, despite being issued a PTIN, Davenport operated as a ghost preparer and that Davenport and My Unity used software intended for personal rather than professional use to prepare clients' returns, so when the returns were filed it appeared that clients had filed the returns themselves.
McAllen, Texas: Three sisters have been sentenced for their roles in a conspiracy to assist in the preparation of filing fraudulent federal returns.
Maria Lourdes Campos and her sisters Elizabeth Romo and Gloria Romo
Campos owned and operated Campos Tax Service in the Rio Grande Valley for more than 10 years, where she employed her two sisters. With the sisters' assistance, most CTS clients fraudulently applied for and claimed either residential energy credits, business expenses or childcare credits. Once CTS employees completed the tax returns, they did not review the completed documents with their clients and only provided them with refund amounts or incomplete documents.
From 2018 to 2020, Campos Tax Service filed some 6,501 federal income tax returns that included more than $5 million of residential energy credits. Throughout the years that Maria Campos orchestrated this scheme, she purchased luxury vehicles and expanded her business to three locations.
The phony filings between Campos, Elizabeth Romo and Gloria Romo resulted in a total sustained tax loss of $3,672,472.
Campos, Elizabeth Romo and Gloria Romo were ordered to pay restitution ($151,741 for Campos, $119,793 for Elizabeth Romo and $9,528 for Gloria Romo). Campos and Elizabeth Romo were also ordered to serve three years of supervised release after their imprisonment.
San Diego: Restaurateur Leronce Suel has been convicted of wire fraud, conspiracy and tax crimes for schemes to defraud pandemic-relief programs and to file false returns.
Suel was the majority owner of Rockstar Dough and Chicken Feed, both of which operated area restaurants. He conspired to underreport more than $1.7 million in gross receipts on Rockstar Dough's 2020 corporate return and pandemic-relief applications.
His businesses fraudulently received $1,773,245 in Paycheck Protection Program loans and Restaurant Revitalization Fund grants. Suel and his co-conspirator used the money for cash withdrawals from their business bank accounts, purchasing a home in Arkansas and having more than $2.4 million in cash in a bedroom.
Suel did not file timely tax returns for 2018 and 2019. Also, during the period 2020 through 2022, Suel did not file personal returns that reported flow-through income from his businesses and personal income he received from his business. In 2023, Suel filed false original and amended returns for several years, including personal returns for 2016 and 2017 that included false depreciable assets and business losses.
He caused a total federal tax loss of $1,292,976.
Suel was convicted of wire fraud, conspiracy to commit wire fraud, tax evasion, conspiracy to defraud the U.S., filing false returns and failing to file returns. He was acquitted of money-laundering charges. He agreed to forfeit $1,466,918.
Sentencing is Dec. 13. He faces up to 30 years in prison for each count of wire fraud and conspiracy to commit wire fraud, a maximum of five years in prison for tax evasion and conspiracy to defraud the U.S., up to three years for each count of filing false returns and a maximum of a year in prison for each count of failing to file returns.
Ft. Lauderdale, Florida: A federal district court has issued a permanent injunction against tax preparer Dexter Bataille, individually and doing business as Capital Financial Group Holdings.
The court ordered the closure of Bataille's business and barred him from preparing or assisting in preparing federal income tax returns or transferring his client lists. The court also ordered him to pay $134,400 he received from his tax prep business. Bataille agreed to both the injunction and the order to pay.
The complaint alleged that he prepared clients' returns that fraudulently claimed various false or inflated deductions and credits, including false and exaggerated profits and expenses to generate inflated business losses, incorrectly reported filing statuses and dependent claims and false reports of household help income.
Prineville, Oregon: Darla K. Byus, 55, has been sentenced to four years in prison and three years of supervised release for using stolen IDs to submit fraudulent health care claims resulting in more than $1.5 million in misappropriated funds from the Oregon Health Authority Medicaid Program and for filing tax returns that failed to report earnings she received.
From January 2019 to August 2021, Byus used her company, Choices Recover Services, to overbill Medicaid for substance abuse counseling services and to submit fraudulent reimbursement claims using the stolen IDs of Medicaid recipients.
Choices Recover had access to a provider portal through the Medicaid Management Information System, which Byus exploited to determine a victim's Medicaid eligibility. She used the stolen IDs of more than 45 victims, at least a third of whom were identified by searching jail roster websites for recent drug- or alcohol-related offenses.
Byus received more than $1.5 million in fraudulent proceeds, which she used to purchase multiple properties in Oregon and to gamble.
She also filed false returns for herself and CRS, failing to pay some $450,438 in taxes.
Byus, who pleaded guilty in June, was also ordered to pay $2,033,315 in restitution to Oregon Medicaid and the IRS.
