Twice as nice; fuelin' around; before the Inc. dries; and other highlights of recent tax cases.
St. Augustine, Florida: Business owner John M. Williams has pleaded guilty to failing to account for and pay over to the IRS income taxes, Medicare taxes and Social Security taxes withheld from employees' pay.
In 2012, Williams became an owner, operator and a corporate officer of First Coast Exteriors, a stucco application and home building business. Examination of W-2s filed for First Coast employees showed that during the financial quarter ending March 31, 2013, through the quarter ending Dec. 31, 2018, First Coast Exteriors withheld payroll taxes from its employees' wages but also that Williams did not account for these withholdings in Form 941 quarterly tax returns or pay these funds over to the IRS when the returns and payments were due.
Between 2013 and 2018, his actions resulted in unpaid payroll taxes of some $306,500. During this same period, Williams also did not pay the IRS the employer's matching share of Social Security and Medicare taxes, an additional $128,943.
First Coast Exteriors was not the only company that Williams operated that was delinquent in paying its payroll taxes. Records show that beginning in 1995, he operated a business called W.W. Contractors, and for the 13 financial quarters between 2009 and 2012, W.W. Contractors filed 941s but only made partial or late payments of payroll taxes withheld and owed to the IRS.
Williams faces a maximum of five years in prison.
Las Vegas: Tax preparer Jessica Avras has pleaded guilty to assisting in the preparation of false income tax returns.
From 2015 to 2020, Avras operated a tax prep business. During that time, she prepared and filed false returns that fraudulently reduced the income tax owed or inflated the refunds due to her clients. Avras routinely reported fictitious businesses that had significant purported losses or reported fabricated deductions, including non-cash charitable contributions and sales taxes.
Avras admitted that her conduct caused a tax loss to the IRS of some $525,000.
Sentencing is Jan. 4, when she will face up to three years in prison. She also faces a period of supervised release and monetary penalties.
Lebanon, Ohio: Tax preparer Patrick Noel Thayer, 48, has been sentenced to a total of 15 years in prison for securities fraud, aggravated theft and ID fraud.
Thayer defrauded a local woman and stole more than $1.31 million from her investment proceeds. He operated the tax prep service Broadway Financial Solutions and worked as a securities salesperson for various brokerage firms; he was later licensed as an investment adviser.
In 2013, Thayer opened a bank account in the victim's name without her knowledge or consent and began selling securities from the victim's brokerage account and transferred the proceeds to the new account. From there he used the money for his own expenses, including a down payment on his home, mortgage payments, car loans, credit card expenses and the purchase of a house in Colorado for a family member.
The victim became aware of the fraud in 2022 when she was contacted by the IRS about the bank account that Thayer had opened in her name.
He will serve his three five-year sentences consecutively. Thayer was also ordered to pay $1,025,235.13 in restitution to the victim.
Lawrenceville, Georgia: Stanley Worthy Jr. has been sentenced to five years in prison after pleading guilty to wire fraud, conspiracy to commit wire fraud and aiding in the filing of false returns.
Worthy, who pleaded guilty in June, was sentenced to 60 months for conspiracy to commit wire fraud and wire fraud and to 36 months for aiding in the filing of false returns, all sentences to run concurrently.
From 2019 to 2020, Worthy and his conspirators used the Soamazin Automotive car dealership in Warrensville Heights, Ohio, to purchase stolen vehicles at a discount and sell those vehicles to unsuspecting buyers for profit. The conspirators devised a scheme to have individuals apply for loans to fund the purchase of non-existent vehicles then split the loan proceeds between themselves and the applicant. Worthy recruited applicants from clients of his company, Cavalier Care, which offered tax prep services and financial education.
From 2017 to 2020, Worthy fraudulently prepared 35 returns for others to increase their refunds, causing a loss of some $211,737 to the United States.
He was also ordered to serve three years of supervised release and pay $2,935,933.35 in restitution jointly and severally with co-defendants. A special assessment of $4,200 was also ordered.
Atlanta: Joseph Oluwafemi Kolawole Akoshile of Mansfield, Texas, has been sentenced to 51 months in prison to be followed by two years of supervised release for a $3.5 million tax fraud relating to false returns claiming fuel tax credits.
Akoshile, who pleaded guilty and was convicted in June, committed a wide-ranging fraud that resulted in the issuance of more than 100 fraudulent Treasury checks worth more than $3.5 million. For more than five years, Akoshile and others submitted federal corporate returns claiming refunds for a web of corporations set up using stolen IDs. The returns claimed false fuel tax credits, resulting in large refunds.
Akoshile received the fraudulent refund checks and altered them to change the payee to a corporation created for the scheme. He then laundered these funds through other accounts, including multiple business accounts he controlled in one of his many aliases.
He was also ordered to pay $3,606,990.10 in restitution.
Strafford, Missouri: Business owner Philip Russell Turner, 53, has pleaded guilty to filing a false return.
Turner, co-owner and president of a business, admitted that he filed a false return for 2018. He claimed only $15,088 in income although he had received additional income that should have been reported.
He used funds from his company to pay for some $612,144 in renovations to his residence in Strafford and cabins in Colorado in 2017 and 2018. He falsely told his accountant that the expenses for the renovations were expenses incurred by the company for, among other things, renovating company offices so his accountant would not include the renovations as personal income on Turner's returns.
His personal income for 2017 and 2018 was unreported by some $612,144. Turner also has an outstanding income tax liability of $97,765 for 2017 and $61,201 for 2018. He owes $351,620 in unpaid taxes from 2013, 2014 and 2015.
Turner must pay the IRS $510,586, plus interest. He faces up to three years in prison.
Charlton, Massachusetts: Exec Michele L. Letourneau has pleaded guilty to filing a false return and engaging in a pattern of financial transactions designed to avoid bank currency transaction reporting requirements.
Letourneau was president, treasurer and majority owner of a commercial trash collection and removal business. In 2016 through 2020, she skimmed business income by directing office staff to separate checks written to her company that contained "Inc." in the payee description from those that did not. Checks that included "Inc." were logged into the company's customer tracking system and accounting ledgers and deposited into the business bank account; the separated checks were given to Letourneau after being logged into the company's customer tracking system but not into the accounting ledgers.
Letourneau regularly batch-deposited most of the checks missing the "Inc." into a personal bank account that she jointly held with another person, keeping each deposit under $10,000. Letourneau later withdrew the exact amount deposited.
She structured some $1,261,724 worth of transactions from 2016 to 2020 and did not disclose this income or the bank account to the preparers of her corporate and personal returns. Letourneau admitted to filing a false 2018 personal return that substantially underreported her income for that year and, in total, her conduct during this period cost the U.S. $472,167.
Sentencing is Jan. 4. She faces up to three years in prison for filing a false return and five years for cash structuring. She also faces a period of supervised release, restitution and monetary penalties.
