Two-state two step; primed for prison; contemptible; and other highlights of recent tax cases.
Bella Vista, Arkansas: Angel Denette Cameron, from Louisiana, has been sentenced to 66 months in prison to be followed by three years of supervised release on one count of false claims against the U.S., one count of false declaration under perjury and one count of aggravated identity theft.
In March 2020, police obtained a search warrant on Cameron’s residence after she lied to law enforcement about her identity and offered them false ID documents. Officers found tax information of various third parties in her possession.
Federal agents later determined that Cameron had filed and prepared at least 21 false tax returns for individuals from 2016 through 2019 in Arkansas and Louisiana, resulting in a federal tax loss of $86,381. Cameron used fraudulent deductions, tax credits and income information on federal returns.
Investigators also determined that she had been filing false returns on her own behalf from 2015 through 2020, in Arkansas and Louisiana, which resulted in a $12,653 tax loss. She also used a false ID to open a bank account and purchase a vehicle.
She was also ordered to pay $109,626.64 in restitution and a $300 assessment.
Howell, New Jersey: Business owner Wilson Salas-Molina has been sentenced to a year and a day in prison for tax evasion and failure to pay the IRS more than $540,000 in employment taxes.
Salas-Molina was the owner and operator of US Contractor Inc. (a.k.a. Wilson Contractors Inc., a.k.a. WC Contractor Inc.), a roofing business. From 2012 to 2018, he cashed checks from clients at a check-cashing service and paid his 14 employees in cash to conceal his payment of wages and his failure to report, account for and pay over federal employment taxes.
Salas-Molina, who previously pleaded guilty, was also sentenced to three years of supervised release and ordered to pay $541,181 in restitution to the IRS.
Nantucket, Massachusetts: Durvan C. Lewis, 51, owner of a commercial and residential painting business, has been sentenced to two years in prison in connection with a seven-figure income diversion and payroll tax scheme.
Lewis owned and operated DCL Painting, and from 2014 through 2017 he diverted over $1.5 million of the company’s gross receipts to his personal bank account and failed to report the diverted receipts to his preparer. During the tax quarters ending March 31, 2012, through Sept. 30, 2019, he also paid more than $5 million in wages to DCL Painting’s employees in cash.
He also underreported his personal income tax obligations and failed to report and pay over to the IRS the employment taxes owed on the cash wages.
The federal tax loss totaled $2,084,852.
Lewis, who pleaded guilty in February, was also sentenced to two years of supervised release and a fine of $10,000 and was ordered to pay $2,084,852 in restitution to the IRS.
Springfield, Missouri: Heather Nicole Neal has been sentenced to 30 months in prison for her role in a conspiracy, led by a local inmate, to fraudulently claim more than $51,000 in refunds.
Neal, who pleaded guilty in September, admitted that she conspired with John Dennis Sedersten, a jail inmate in Ozark, Missouri, and other conspirators to file fraudulent returns. All false claims but one were halted by the IRS; law enforcement recovered the one refund issued.
Sedersten organized and led the conspiracy from the jail. He provided his conspirators with instructions to complete and file false federal income tax returns. The returns included false W-2 information, listing employers who did not employ the individual listed on the return, and reporting wages not earned, employment taxes not withheld and business expenses not incurred. Sedersten provided the EIN for JDS Enterprises, a company registered to him.
Neal filed a return under her own name that fraudulently claimed a $9,864 refund.
Co-defendant Janet Renea Kirby, of Springfield, Missouri, has also pleaded guilty and awaits sentencing. Kirby filed a return under her own name that fraudulently claimed a refund of $18,427.
Sedersten, who pleaded guilty in a separate but related case, admitted that conspirators filed fraudulent returns that sought a total of $373,372 in refunds. He was sentenced in 2016 to 78 months in prison for his role in the conspiracy.
Las Vegas: Federal inmate Jabari Laquan Marshall and his accomplice have pleaded guilty to charges stemming from a fraudulent withholding scheme.
Marshall devised the scheme while in prison. He provided co-defendant Jalen Tony Henry with false documents that purportedly showed the sale of certain trade secrets for $25 million during the 2014 tax year. To make those false documents appear more credible, Marshall used the real Social Security numbers of two other people.
In April 2015, Henry filed an amended tax return for tax year 2014, using the false documents and fraudulently claiming that — as part of the fictitious sale of the trade secrets — $5,575,633 in federal income tax had been withheld. Henry requested a refund of $1,359,645 and received a refund check for $1,439,039, which he deposited into his bank account. Marshall then directed Henry to split the funds among their family members.
Because of the suspicious nature of the transaction, Henry’s account was frozen; the IRS recovered $1,433,971 of the refund.
Marshall pleaded guilty to one count of theft of government money and one count of aggravated ID theft. Henry pleaded guilty to one count of theft of government money. The maximum is 10 years in prison for theft of government money and two years in prison for aggravated ID theft. Sentencing of both Henry and Marshall is Aug. 13.
North Lauderdale, Florida: A federal court has held two individuals and their alleged firm in contempt for violating a preliminary injunction that restricted their tax prep activities.
The United States filed a complaint against Wendell Devallon, Berald Dominique and Tax Time Group Inc. in December, seeking to enjoin them from preparing returns for others. The complaint alleges that Devallon and Dominique co-own Tax Time Group, which has its principal place of business in North Lauderdale and additional offices in Charlotte, North Carolina; Niagara Falls and Buffalo, New York; and Evansville, Indiana.
According to the complaint, the defendants prepared returns for clients that claimed fraudulent self-employment expenses, education credits and charitable contributions, among other schemes. The complaint also alleged that Devallon and Dominique acted as ghost preparers.
In January, the court entered an injunction against all three defendants, requiring them to cease prep and filing services at certain offices, including the Florida location. On May 3, the United States sought an order to show cause and a temporary restraining order, alleging that Devallon, Dominique and Tax Time Group were violating that preliminary injunction.
According to the show cause motion, the defendants continued to prepare returns out of the North Lauderdale location but masked their involvement by submitting those returns through entities purportedly based in Indiana and Pennsylvania. The motion for a temporary restraining order alleged that proceeds from the prohibited tax prep were being deposited into five bank accounts, three of which were in the name of nominee entities. The court then entered a temporary restraining order prohibiting Devallon, Dominique, and Tax Time Group Inc. from accessing the funds in those accounts.
The court will determine sanctions at a later date.
Mapleton, North Dakota: Tax preparer Benjamin Boway, 43, has been sentenced to 18 months in prison for aiding in preparation of false returns.
Between 2015 and 2018, Boway, the sole owner and operator of Bennie Tax Services, filed fraudulent returns, some of which represented that the taxpayers were entitled to claim credits and deductions that he knew were illegitimate.
The tax loss was $134,298.
He was also sentenced to a year of supervised release and ordered to pay $134,498 in restitution and $500 in special assesment fees.
