More mortgage; a different kind of co-pay; no prize inside; and other highlights of recent tax cases.
Charlotte, North Carolina: Resident Mehef Bey, a.k.a. Arthur Daniels, has pleaded guilty to conspiring to defraud the U.S. by promoting a nationwide tax fraud and assisting in the preparation and filing of false returns for the participants.
Bey promoted a scheme that involved recruiting clients and preparing false returns on their behalf by convincing them that their mortgages and other debts entitled them to refunds. Between 2014 and 2016, Bey and his conspirators held seminars across the country to publicize the scheme.
Bey and his conspirators helped prepare and file returns for the participants, which collectively sought more than $64 million in federal refunds from the IRS. These tax returns falsely claimed that banks and other financial institutions had withheld income tax from the participants, entitling the clients to a refund. He admitted he and his conspirators charged their clients some $10,000 to $15,000 in prep fees for each tax return.
Although Bey received more than $1 million for his role in the scheme, he filed no returns for the years 2015 and 2016. For 2014, he did file a false income tax return on which he claimed a refund he was not entitled to receive.
Bey also admitted he and his conspirators concealed their roles in the scheme by, among other things, indicating that the false tax returns had been “self-prepared” and coaching participants how to conceal the scheme from the IRS.
Bey faces up to five years in prison for conspiring to defraud the United States and three years in prison for each of the two counts of aiding and assisting in the preparation and filing of a false tax return. He also faces a period of supervised release, restitution and monetary penalties.
Three of Bey’s co-conspirators —
Clearwater, Florida: Health care executive Joshua Maywalt has pleaded guilty to four counts of health care fraud, four counts of aggravated ID theft, one count of filing a false federal income tax return and two counts of failing to file federal income tax returns.
Maywalt, a medical biller at a company that furnished credentialing and medical billing services to its medical provider clients, was assigned to a local physician’s account and was responsible for submitting claims to Florida Medicaid HMOs for that doctor’s services to Medicaid recipients.
Maywalt wrongfully accessed and used the company’s patient information and the doctor’s name and ID number to submit fraudulent claims to a Florida Medicaid HMO for medical services purportedly, but not actually, rendered by the doctor. Maywalt then altered information associated with those claims so the payments for the fictitious medical services were sent to his bank accounts.
He knowingly signed and filed a false federal income tax return for tax year 2019, substantially understating his income by reporting only his employment wages and not the amounts he was depositing into his bank accounts from the scheme. He also failed to file federal income tax returns for 2017 and 2018.
He faces a maximum of 10 years in prison for each health care fraud count, a two-year mandatory consecutive sentence on the aggravated ID theft counts, a maximum of three years for filing a false income tax return and up to two years for each failure to file an income tax return. He also faces forfeiting $2.2 million in funds and property from the scheme.
Newport News, Virginia: Commercial fisherman Alfredo Loya Jr. was sentenced to 15 months in prison for evading payment of his federal income taxes for nearly a decade.
From 2006 to 2016, Loya worked as an independent contractor for fishing companies but failed to file returns from 2006 to 2008 and 2014 to 2016. He filed returns from 2011 to 2013 but did not pay tax owed.
Loya failed to make payments to the IRS towards his assessed tax balances for tax years 2006, 2007, 2008, 2011 and 2013, despite being advised by the IRS and his accountant to do so. The combined tax, interest and penalties for these tax years total some $148,026.
He also failed to file federal returns for tax years 2014, 2015 and 2016. Tax due for these tax years totals some $90,940.
Loya is attributed with an overall tax loss of some $238,967.
He took various steps to avoid his assessed tax balances, including dealing heavily in cash. From about 2012 through 2016, he cashed 71 paychecks made payable to him from fishing companies, totaling some $840,400.
Elka Park, New York: Former Wall Street stockbroker Joseph D. Radcliffe has pleaded guilty to conspiring with others to evade taxes on personal income earned from stock sales.
Radcliffe admitted that from at least 2013 through 2019, he conspired with two family members to receive hundreds of thousands of dollars that went unreported to the IRS, allowing him to defraud the IRS and evade the assessment and payment of taxes on some $500,000 in unreported income.
The income originated from capital gains earned in brokerage accounts standing in the names of Crackerjack Classics LLC and Universal Consulting LLC. These companies made payments to Radcliffe, including: $128,147 in mortgage payments and interest that the companies paid, from 2014 through 2019, to the bank that held the mortgage on Radcliffe’s house; $109,022 that the companies paid to a New Jersey law firm in 2014, 2015 and 2017 to settle his unpaid bills; and $99,675 that the companies paid in 2015 and 2016 in checks made out to “cash” and which Radcliffe negotiated for himself or had others negotiate for him.
He further admitted that he did not file a return for himself, or otherwise report his income to the IRS, for the tax years 2013 through 2019. He did not maintain any bank or brokerage accounts in his name nor hold or trade any securities in his own name.
Radcliffe faces up to five years in prison and a maximum $250,000 fine, as well as restitution to the IRS. Sentencing is April 28.
Durham, North Carolina: Two tax preparers have pleaded guilty to conspiring to defraud the U.S. in connection with a scheme that involved preparing and filing false returns.
Whitney Danielle Sales owned and operated the tax prep business Tax Time Solutions from 2014 to 2018. During that time, Sales and another preparer, Janelle Marie Corley, prepared fraudulent returns for clients.
Returns prepared by the conspirators claimed false education credits or manipulated the clients’ income to qualify for larger Earned Income Tax Credits. The two also filed false personal income tax returns.
Sales and Corley intended to cause a tax loss exceeding $1.5 million.
Both previously pleaded guilty. Sales will be sentenced on May 19, Corley on May 26. They each face a maximum of five years in prison for the conspiracy, as well as a period of supervised release, restitution and monetary penalties.
Orange, Connecticut: Businessman Matthew V. Blackwell of Woodbridge, Connecticut, has pleaded guilty to one count of tax evasion.
Blackwell was the vice president of operations at a family-owned food company. Between about 2012 and 2016, he embezzled $927,143 from the company by creating false purchase orders and invoices that he presented to the company controller, who had no knowledge of the fraud. The company issued payment checks that Blackwell deposited in a business checking account that he controlled.
Blackwell admitted that he filed federal income tax returns that omitted the embezzled income for the 2012 through 2016 tax years, resulting in a federal tax loss of $285,361.
Sentencing is March 2, when he faces a maximum of five years in prison and a fine of up to $100,000. He has agreed to pay $285,361 in back taxes, as well as interest and penalties.
