COVID cons; no IRA, no school, no problem; plane stealing; and other highlights of recent tax cases.
Augusta, Georgia: Tax preparers Ezra Hatcher Sr., of Hephzibah, Georgia, and his daughter Sherry Hatcher have been sentenced for filing fraudulent returns for clients.
Ezra Hatcher was sentenced to two years in prison to be followed by three years of supervised release and ordered to pay $69,682 in restitution after previously pleading guilty to conspiracy to defraud the United States. Sherry Hatcher was sentenced to five years of probation and ordered to pay $4,141 in restitution after previously pleading guilty to aiding and assisting in the filing of a false return.
From 2014 to 2018, the Hatchers' tax services filed 21 returns containing fraudulent information on behalf of seven individuals. The returns included false information relating to Schedule C expenses, income and earned income credits; the IRS issued excess refunds amounting to nearly $75,000.
Ezra Hatcher previously served a federal sentence for preparing false income tax returns after pleading guilty in 1998.
The Hatchers are also each permanently prohibited from preparing or filing federal tax returns for anyone other than themselves.
Beverly Hills, California: Ramiro Da Rosa Mendes, whose sons previously pleaded guilty to felonies for defrauding COVID-relief programs, has pleaded guilty to fraudulently seeking more than $6.7 million in COVID-related loans for more than half a dozen fake companies.
From April to August 2020, Mendes schemed to fraudulently obtain federal disaster relief funds distributed through the Paycheck Protection Program and Economic Injury Disaster Loan programs. He claimed to own numerous fake businesses in Beverly Hills and Massachusetts, as well as other businesses registered in Wyoming.
Mendes admitted to submitting 19 applications for PPP and EIDL loans that contained false and fraudulent information, including the purported existence of payroll expenses, phony tax forms and the operational status of the businesses. He admitted to stealing the COVID-relief loans and misusing the proceeds for his own personal benefit, including the purchase of cryptocurrency. He further admitted that the intended loss in this case was some $6,708,963 and the actual loss was at least some $2,228,302.
Sentencing is Dec. 12. Mendes faces a maximum of 20 years in prison.
His sons — Ammon Jose de Pina Mendes, of Beverly Hills, and Mateus Pina Mendes, of Los Angeles — each pleaded guilty in September to one count of wire fraud. Using the names of fake businesses, they fraudulently obtained a total of some $365,000 in PPP and EIDL loans. Their sentencings are Nov. 29; they each face up to 20 years in prison.
Parkville, Missouri: Patrick Michael Dingle has been sentenced to eight years in prison for his role in a $335 million scheme to defraud federal programs and, in a separate case, to filing false returns.
Dingle, who previously pleaded guilty, conspired with Matthew C. McPherson, 46, of Olathe, Kansas, to fraudulently obtain contracts set aside by the federal government for awards to small businesses owned and controlled by veterans, service-disabled veterans and minorities.
Dingle was the operations manager for Zieson Construction Co. in North Kansas City, Missouri. The company was formed in 2009 with Stephon Ziegler, 61, an African-American service-disabled veteran, as the nominal owner. Zieson's primary business was obtaining federal construction contracts set aside for small businesses owned and controlled by service-disabled veterans or certified minorities. Ziegler did not control the day-to-day operations or the long-term decision making of Zieson; Dingle and his co-conspirators actually controlled and operated Zieson, and received most of the profits.
Between 2009 and 2018, although Zieson was not eligible, the firm received approximately 199 federal contracts set aside for minority- and veteran-owned small businesses. The government paid Zieson approximately $335 million for those contracts, for which conspirators gained approximately $15 million in profit. Dingle, McPherson and others submitted false and fraudulent past performance questionnaires in support of Zieson bids for set aside contracts.
McPherson was sentenced in January to 28 months in prison without parole after pleading guilty; he was ordered to forfeit to the government $5,516,786. Ziegler was sentenced in May to a year in prison after pleading guilty.
Dingle also pleaded guilty, in a separate case, to filing a false return. He admitted that he claimed $799,425 in fraudulent business expenses for 2016, costing the government some $349,784. He also admitted that he filed false returns from 2013 to 2016, resulting in a total loss to the government of $615,847.
Dingle was also ordered to forfeit to the government $4,659,061 and to pay $615,847 in restitution to the IRS and $82,704 restitution to the Missouri Department of Revenue.
Tacoma, Washington: Abidermi Rufai, a resident of Lekki, Nigeria, has been sentenced to five years in prison for wire fraud and aggravated ID theft for his attempt to steal nearly $2.4 million from the United States, including some $500,000 in pandemic-related unemployment benefits.
Between 2017 and 2020, Rufai attempted to obtain more than $1.7 million in IRS tax refunds by submitting 675 false claims. The IRS paid out $90,877 on these claims.
Since 2017, Rufai stole the personal identifying information of more than 20,000 Americans to submit more than $2 million in claims for federally funded disaster relief benefits and fraudulent returns. Various agencies involved paid out more than $600,000. Rufai also submitted fraudulent pandemic unemployment claims in at least 17 other states and between April and June 2020 submitted 19 fraudulent EIDL applications; The SBA paid out $10,000.
In September and October 2017, he submitted 49 disaster relief claims connected with Hurricane Harvey and Hurricane Irma. He filed $24,500 in false claims and was paid on 13 claims, totaling $6,500.
Rufai, who at the time of his arrest in 2021 was the special assistant to the governor of Nigeria's Ogun State, has agreed to pay full restitution of $604,260 but has not fully cooperated in identifying and forfeiting assets that could be used for restitution.
Atlanta: Tax preparer Kyle Self, 48, has been sentenced to 18 months in prison to be followed by a year of supervised release for defrauding the IRS through the submission of false tax returns on behalf of clients.
Self owned and operated a tax prep business called DeKalb Tax Services, which also operated under the names Tax Shield and Instant Tax. Self filed false returns on behalf of his clients between 2015 and 2018 to generate fraudulent refunds, falsifying information related to Schedules C, IRA deductions, tuition deductions, capital losses and HOH status. The loss to the IRS was $428,175.
For one taxpayer, Self falsely claimed: capital losses on investments; IRA deductions for the same taxpayer even though she had no IRA account; deductions for tuition and fees though neither the taxpayer nor her son attended school; business losses related to her work as an Uber driver, a job she had never held; and that the taxpayer's son was disabled. Self kept much of the money for himself after generating the fraudulently inflated returns.
Self, convicted in January after pleading guilty, was also ordered to pay $422,936 in restitution.
Liberty Center, Ohio: Electrical engineer John Everson has been convicted of tax evasion after he used a sham trust to help conceal three years of income.
From about 2012 through 2015, he earned more than $1.3 million from his business. He attempted to conceal much of this income and evade personal federal income taxes by instructing clients to pay a trust that he controlled.
Everson used the money in the trust to pay personal expenses and make large cash withdrawals. He also funneled some of the trust funds to other bank accounts held in the names of nonprofits that he and several family members controlled and put his home and personal airplane in the name of the nonprofit organization.
Everson caused a loss to the U.S. Treasury of more than $500,000.
Sentencing is March 16. He faces a maximum of five years in prison on each of the three counts of his conviction.
