A different kind of term; hard labor; Niagara fall; and other highlights of recent tax cases.
Cambridge, Massachusetts: James Lewis, 76, the only person ever convicted in connection with the 1980s Tylenol murders and a one-time tax preparer, was found dead in his home,
Lewis was convicted of attempting to extort $1 million from Tylenol maker Johnson & Johnson in 1982 and served 12 years in prison, reports said, adding that he described the scheme the killer would have used to fill Tylenol capsules with deadly cyanide, though he always denied he was responsible.
Lewis was reportedly convicted of mail fraud in a 1981 credit card scheme. In 1978, he was charged with the dismemberment murder of Raymond West, 72, who had hired Lewis as an accountant. The charges were dismissed, but he was charged in 2004 with rape, kidnapping and other offenses for an alleged attack on a woman in Cambridge. He was jailed for three years while awaiting trial, but prosecutors dismissed the charges.
Police in 1983 described Lewis as a "chameleon" who lived in several states, used at least 20 aliases and held many jobs, including accountant, computer specialist, importer of Indian tapestries and salesman of jewelry, pharmaceutical machinery and real estate.
Bristol, Connecticut: Insurance salesman John Horvath has pleaded guilty to fraud and tax offenses.
Horvath sold annuity contracts issued by Allianz Life Insurance Co. of North America to clients. Beginning no later than July 2015 and continuing until April 2021, he defrauded clients by advising them that they could achieve better rates of return through alternative investments rather than their existing annuity contracts, and that he could broker and manage those investments for them.
Victims gave Horvath investment funds with the expectation he would manage the funds. He instead commingled the money with his own money and used it to pay personal expenses and repay earlier victims. He defrauded at least eight victims out of almost $1.2 million.
Horvath also failed to pay income taxes on his income from the scheme, resulting in a loss to the government of $267,739 for the 2015 through 2020 tax years.
He pleaded guilty to one count of wire fraud, which carries up to 20 years in prison, and one count of tax evasion, which carries a maximum of five years. Sentencing is Oct. 18.
Columbia, South Carolina: Tax preparer Georgina Gonzalez has been sentenced to 37 months in prison for conspiring to defraud the U.S. by preparing and filing false returns.
Gonzalez, formerly of Miami, worked as a tax preparer since at least 2013. For the 2016 and 2017 seasons, she temporarily relocated to South Carolina to prepare returns and manage multiple locations of a tax prep business in Columbia. At these offices, Gonzalez conspired to inflate clients' refunds by preparing returns that falsely claimed, among other things, business losses, household help income and American Opportunity Tax Credits and education tax credits. Gonzalez and her conspirators charged clients up to $999 to prepare each return.
She caused a tax loss to the IRS of more than $420,000.
Gonzalez, who previously
Omaha, Nebraska: Attorney Thomas O. Campbell has pleaded guilty to filing a false return.
Between 2014 and 2018, Campbell was the owner and manager of TLN Law, a solo practice law firm. During this time, he filed annual personal tax returns that understated TLN's gross receipts by more than $2.8 million.
He caused a federal tax loss exceeding $250,000.
Sentencing is Nov. 30. Campbell faces up to three years in prison, as well as a period of supervised release, restitution and monetary penalties.
Key West, Florida: The operators of several labor staffing companies have been sentenced for tax and immigration-related crimes.
Between 2014 and 2020, Eka Samadashvili, Davit Pavliashvili and others helped run a series of labor staffing companies that facilitated the employment of non-resident aliens in hotels, bars and restaurants; the laborers were not authorized to work in the United States. These companies did not withhold federal income and Social Security and Medicare taxes from workers' wages and did not report the wages to the IRS.
Samadashvili was sentenced to three years in prison for conspiring to harbor aliens and induce them to remain in the U.S. and for conspiring to defraud the U.S. Samadashvili was also ordered to serve three years of supervised release and pay some $8,473,785.69 in restitution to the United States.
Pavliashvili was sentenced to 18 months in prison for conspiring to harbor aliens and induce them to remain in the U.S. and for filing a false federal return. Pavliashvili was also ordered to serve three years of supervised release and pay some $16,925.31 in restitution to the United States.
Niagara Falls, New York: Building owner Frank R. Parlato Jr., convicted of willful failure to file returns involving cash transactions of more than $10,000, has been sentenced to serve a year of supervised release, to include five months of home detention, and fined $10,000.
Between 2004 to 2017, Parlato had an ownership interest in or managed a building in Niagara Falls. After he acquired the building, he let vendors lease space inside and outside the building. These vendors catered to tourists and were typically busy in the summer; each season Parlato negotiated new seasonal rental agreements with the building's vendors, typically requiring each vendor to pay 25% of their gross revenue as rent. Parlato was required to file a federal Form 8300 when receiving annual cash rent payments of more than $10,000 in one transaction or two or more related transactions. During the time he owned or managed the building, he failed to file the 8300s.
Parlato also agreed to forfeit $1,000,138 and will pay $184,939 in restitution to the IRS.
Woodmere, Ohio: Business owner Timothy Ray Jenkins has been sentenced to 30 months in prison after pleading guilty to failure to account for and pay over taxes.
Jenkins was manager and owner of Dan-Ray Construction, an LLC doing business in and around Cleveland that was engaged in construction services, often working as a subcontractor. He was responsible for collecting employment taxes, accounting for employment taxes by filing federal employment returns and paying over to the IRS the employment taxes for employees.
He had another company prepare payroll and employment tax returns for Dan-Ray, instructing the company to turn over to him the returns and other reports and tax filings that the company prepared. Jenkins said he would file employment returns and other filings but failed to do so. He also withheld employment taxes from employees' paychecks but failed to pay over the employment taxes to the IRS.
He was also ordered to serve three years of supervised release and to pay both a $1,100 special assessment and $1.17 million in restitution to the IRS.
Altamonte Springs, Florida: Dentist Frantz Brignol has been found guilty of tax evasion.
Brignol amassed more than $600,000 in federal tax liabilities. Between 2014 and 2020, he evaded tax payments by hiding hundreds of thousands of dollars in his mother's bank accounts, for which he had signatory authority. He traded funds overseas in his mother's name and made false statements to the IRS on financial disclosure forms.
He faces up to five years in prison. Sentencing is Nov. 9.
