Fictions and ghosts; Indian connection; pulled over; and other highlights of recent tax cases.
Bristol, Vermont: Bookkeeper Jodi Lathrop has pleaded guilty to wire fraud and tax evasion.
Lathrop was charged in an indictment with a scheme to embezzle from Claire Lathrop Band Mill, d/b/a Lathrop Forest Products, a wood-logging and wood-chipping company co-owned by Lathrop's husband and her brother-in-law. She served as Band Mill's bookkeeper.
Between June 2014 and April 2020, she embezzled using a scheme that included writing unauthorized company checks to pay her personal credit card bills and making unauthorized charges on company credit cards to pay her personal expenses.
She concealed the embezzlement in several ways, falsely recording the unauthorized checks as checks for legitimate business expenses, writing false notes on some checks so they appeared to be for legitimate expenses and causing the company to file false returns which falsely deducted Lathrop's personal expenses as business-related.
She also filed false personal returns for 2014 to 2019, failing to report as income the embezzled funds.
The indictment alleges that Lathrop embezzled more than $400,000 over the course of the scheme and evaded personal income taxes of some $141,000.
Lathrop agreed to sell some 270.5 acres of land she owns and to use the proceeds for restitution to the victims.
Sentencing is April 1. Lathrop faces up to 20 years' imprisonment and three years' supervised release.
Tampa, Florida: A federal court has permanently enjoined Tyrone Johnson and TJ Professional Services from preparing federal income tax returns for others, from owning or operating any return business in the future and from transferring customer lists or other customer information.
The court accepted that since 2016 the defendants have prepared returns that claimed fictitious businesses and fabricated business losses to inflate refunds. The complaint alleged that the defendants' schemes have cost the Treasury millions. The order also accepted that Johnson does not file using his PTIN but hides his involvement by using only the taxpayer's identification number.
According to the order, both Johnson and TJ Professional Services failed to appear in the action. The court also permitted the U.S. to conduct post-judgment discovery to monitor compliance.
Atlanta: Businesswoman Angela Brady, aka Angela Brady-Williams, 51, has been sentenced to 33 months in prison to be followed by a year of supervised release for filing false returns in connection with her IT consulting business.
Brady falsely claimed that she'd incurred millions of dollars in contract labor expenses and, despite making millions in income, sought and received refunds.
She operated AB Williams & Associates. Having no full-time employees, she often contracted her work to India, paying the workers via PayPal. Between 2013 and 2018, she claimed that she incurred millions of dollars more than she actually did paying these contractors via PayPal. As a result, she was able to reduce her taxable income by her claimed business expenses, and in some years, obtained a federal refund despite earning more than $1 million. She accomplished this fraud by providing false spreadsheets to her tax preparer and later providing a similar false spreadsheet to IRS agents.
Brady's fraud resulted in a loss of close to $1.1 million in unpaid taxes.
She was also ordered to pay $1,080,606.44 restitution.
Anderson, California: Deborah Gwen Orrey has been sentenced to 18 months in prison for making and subscribing a false return.
Orrey, who
She also falsified information on returns that she filed for clients and split the refunds due without the clients' knowledge, causing a portion of the refunds to be deposited to her own bank account.
Orrey was ordered to pay $115,362 restitution, the total loss to the IRS.
Robins and Richton Park, Illinois: Former resident and tax preparer Erica Early has been sentenced to 14 months in prison for willfully preparing false returns for clients.
Early, who
A U.S. Postal Service employee during some of the time she was preparing the false returns, Early also falsified her own returns, claiming education credits she knew she was ineligible to receive.
Early concealed her scheme by marking returns as self-prepared instead of identifying herself as the paid preparer. Initially, Early directed her fees and client refunds to her personal bank account, which was closed by the bank after detecting fraud. She then began requiring her clients to obtain prepaid debit cards in their names that she'd use to deposit her clients' refunds as well as receive her preparation fee, avoiding traditional banks.
Early was also ordered to serve a year of supervised release and to pay $515,990 restitution to the United States.
Worcester, Massachusetts: Former Massachusetts State Police Lieutenant Daniel J. Griffin and former Sergeant William W. Robertson have been convicted of conspiracy, federal programs fraud and wire fraud in connection with an overtime scheme dating back to 2015. In late November, Griffin pleaded guilty to four additional counts of wire fraud and 11 counts of filing false returns.
Griffin, 60, of Belmont, Massachusetts, and Robertson, 61, of Westborough, Massachusetts, were each convicted of one count of conspiracy, one count of theft concerning a federal program and four counts of wire fraud.
From 2015 through 2018, Griffin, Robertson and other troopers in the Traffic Programs Section at State Police headquarters in Framingham, Massachusetts, conspired to steal thousands of dollars in federally funded overtime by regularly arriving late to and leaving early from overtime shifts funded by grants intended to improve traffic safety. When the overtime misconduct came to light in 2017 and 2018, Griffin, Robertson and their co-conspirators took steps to avoid detection by shredding and burning records and forms.
Additionally, Griffin spent significant time running his security business, Knight Protection Services, during hours that he was collecting regular state police pay and overtime pay. From 2012 to 2019, Griffin collected almost $2 million in KnightPro revenue. Of that total, Griffin hid over $700,000 in revenue from the IRS and used hundreds of thousands of dollars in KnightPro income to fund personal expenses, such as golf club expenses, car payments, private school tuition and expenses related to his second home on Cape Cod. Griffin also pleaded guilty on Nov. 27, 2023, to defrauding a private school attended by two of his children.
Sentencing is March 20. The charge of wire fraud provides for up to 20 years in prison; federal program fraud provides for up to 10 years; the charge of conspiracy provides for up to five years. All three also provide for three years' supervised release and a fine of $250,000. The charge of filing false returns provides for a sentence of up to three years in prison, a year of supervised release and a fine of $100,000.
Riverdale, Georgia: Tax preparer Ann Rogers has been sentenced to a year of home confinement, with three years' probation to follow. for aiding in the preparation and presentation of a false and fraudulent return.
Rogers, owner of SLR Tax Inc., prepared a federal return that included fictitious Schedule C business losses and false Schedule A deductions. The fraudulent information in the documents lowered her client's tax liability, resulting in a $204,267 loss to the IRS.
She was also ordered to pay $204,267 restitution to the IRS.
