Twenty and out; stop snapping; agent for change; and other highlights of recent tax cases.
Belle Glade, Florida: Tax preparer Fred Pickett Jr. has been sentenced to 97 months in prison for preparing false returns.
From 2013 to 2016 he prepared returns for some clients claiming that they owned fictitious businesses that lost tens of thousands of dollars each year. He included these nonexistent companies, as well as other false deductions and tax credits, on his clients’ returns to generate undeserved refunds.
Pickett, convicted in December of 22 counts of aiding and assisting the preparation of false returns, was also ordered to serve a year of supervised release and pay some $169,639 in restitution to the IRS.
Strongsville, Ohio: Accountant Angelo Kanaris has been sentenced to six months in prison and six months of home confinement and been ordered to pay $87,068 in restitution to the IRS after pleading guilty to one count of bank fraud and four counts of filing a false return.
Beginning in 2013, Kanaris worked as an accountant for a Cleveland-area company where he was responsible for writing checks to the company vendors and preparing sales tax returns. During this time, Kanaris began writing checks ostensibly on behalf of the company to third-party vendors but actually used a mobile deposit feature to deposit these checks into his own bank account.
From about 2013 through 2017, Kanaris embezzled some $375,656.55 from the company. He also failed to report this as taxable income on his personal returns for those years.
Benton, Louisiana: Tax preparer Marie Kemp, 58, has been sentenced to 30 months in prison to be followed by a year of supervised release.
Kemp, who pleaded guilty in October, worked in the tax prep business for some 20 years. In 2008, she opened Marie’s Tax Service with three local locations and was the sole proprietor. She earned more than $3 million in gross receipts for fees charged for the preparation and filing of clients’ individual returns during tax years 2011 and 2012. Kemp did not register her business as a corporation with the IRS until 2018; business income of her tax prep service should have flowed to her personal income tax return, reportable on Schedule C.
She personally prepared and e-filed her 2011 and 2012 individual federal returns and underreported her business income. Kemp reported falsely low figures in total gross receipts for her tax prep business on Schedule C and losses and income on her 1040. Kemp’s 2012 return did not include a Schedule C for her prep services and false amounts were reported on 1040.
Kemp only reported taxable income of $1,819 for tax year 2011, when her taxable income was $1,604,208. For tax year 2012, she reported no income from her tax prep business when her reported taxable income should have been $1,632,795. She owes taxes for 2011 and 2012 of $1,069,609.
She was also ordered to pay a $50,000 fine and restitution of $1,069,609 to the IRS, and was permanently enjoined from the preparation of returns for anyone other than herself.
Dearborn, Michigan: A husband and wife have pleaded guilty in connection with a fraud involving bankruptcy, public assistance and taxes.
Abraham Elsaghir pleaded guilty to one count of false statement to an agency of the U.S., one count of federal income tax evasion and one count of bankruptcy fraud. Samar Elsaghir, 51, pleaded guilty to one count of false statement to an agency of the U.S. and one count of federal income tax evasion.
In May 2017, the Elsaghirs filed a voluntary Chapter 7 petition in bankruptcy; they received a discharge of their debts that August. The Elsaghirs made false declarations in their bankruptcy petition by both failing to report and underreporting their income.
During the same period, the Elsaghirs made similar false statements to both the IRS on their 2016 return and to the U.S. Department of Agriculture to receive Supplemental Nutritional Assistance Program (SNAP) benefits. The Elsaghirs agreed that from 2014 to 2020 they received nearly $60,000 in undeserved SNAP benefits and that they owed the IRS an additional $70,000 for 2014 to 2018. Abraham Elsaghir also agreed he owed and would pay over $166,000 to unsecured creditors in the bankruptcy case.
Sentencing for both is June 23. Each faces a maximum of five years in prison.
Bridgeport, Connecticut: Tax preparer Torise Baker, 38, has pleaded guilty to a tax fraud offense.
For the 2014 through 2016 tax years, Baker prepared some 3,600 federal returns for clients through 101 Things 2 Do, a multiservice business she operated. Many of these returns claimed false deductions, including unreimbursed business expenses, charitable contributions and tax prep fees.
In April 2016, Baker met with an undercover federal agent posing as a client. The agent provided Baker with a W-2 for the 2015 tax year, told Baker that they’d made no gifts to charity and offered no information about any other valid deductions. On the return that she prepared and filed for the agent, Baker included $5,520 in deductions for charitable gifts; $2,105 for parking fees, tolls and transportation; and $2,660 for uniforms and protective clothing.
She also failed to file her own federal returns for 2015 and 2016.
Baker has agreed to pay $112,956 in restitution to the IRS. She pleaded guilty to one count of aiding and assisting in the preparation and presentation of false and fraudulent income tax returns, which carries a maximum of three years in prison. Sentencing is June 13.
Many of her clients’ returns will need to be amended. Baker’s restitution may be reduced as her clients resolve their own tax liability with the IRS.
Vestal, New York: Restaurateur Nezir “Nick” Boljevic has pleaded guilty to one felony count of willful failure to pay federal payroll taxes.
Boljevic admitted that from 2007 through 2017, while he owned and operated the Vestal Diner, he failed to make payroll tax payments to the government with respect to his employees. He withheld the payroll taxes from employees’ paychecks but did not report the withholdings or turn the money over to the IRS. To avoid collection efforts, Boljevic repeatedly put the Vestal Diner in the names of a series of nominee owners with different EINs for tax purposes, even though Boljevic remained the true owner and operator of the diner.
In total, Boljevic failed to pay some $322,516.51 in federal payroll taxes between 2007 and 2017. He no longer owns or operates the Vestal Diner.
Sentencing is July 6. If the court accepts the plea agreement, Boljevic will receive a sentence of a year and a day in prison and will pay $322,516.51 in restitution to the IRS.
Kingsland, Georgia: Mack Devon Knight, 45, who held himself out as a pastor, mortician, restaurateur and tax preparer, has admitted lying to receive COVID-19 small business assistance.
In February and March 2021, Knight applied for EIDLs from the Small Business Administration on behalf of multiple local businesses. Those applications falsely claimed that Knight had a series of businesses he claimed had up to hundreds of thousands of dollars of gross revenue prior to the COVID-19 pandemic.
Knight admitted that those applications were fraudulent and to sending fictitious documents to the SBA, including a fake tax document and an altered bank record. As a result of those fraudulent filings, he received $149,900 from the SBA on behalf of a claimed tax business. He used a large portion of the funds to buy a luxury car.
He pleaded guilty to two counts of wire fraud, which subjects him to as much as 20 years in prison, financial penalties and restitution and up to three years of supervised release.
Blairsville, Pennsylvania: Bookkeeper Sandra Jo Doak has been sentenced for mail fraud and filing a false income tax return.
Doak was sentenced to 42 months and 38 months in prison, to be served concurrently, and three years of supervised release for defrauding her employer, a medical office. She embezzled about $592,833 that she used for such personal expenses as sporting events and travel.
Doak also concealed the embezzled income from the IRS on her personal income tax returns and was ordered to pay $123,849 in restitution to the IRS.
