Bodies of evidence; the Ultimate crime; one expensive ghost; and other highlights of recent tax cases.
Philadelphia: Businessman Agostino Perna has been sentenced to six months in prison and six months of home confinement for tax crimes.
Perna, who pleaded guilty last year, admitted that he assisted in the filing of false corporate returns and filed false personal income tax returns, with a total tax loss of $455,463.
He was co-owner and operator of Life Quest, a company that sells body parts for medical purposes. He caused Life Quest returns to be filed for 2014 through 2019 that did not report substantial amounts of income. Perna concealed from both his business partner and Life Quest's accountant/tax preparer that Perna had been receiving significant gross receipts — $332,157 — from certain clients, which he ultimately diverted to himself.
Perna filed false personal income tax returns over the same years. He failed to report the more than $300,000 of Life Quest customer payments that he diverted for his personal use.
He also omitted from his returns more than $250,000 in additional income from other businesses he owned. Perna obtained this income having the businesses reimburse him, as a business expense, for using his personal credit cards to pay business expenses, all while he had those businesses directly pay the credit card bills and deducted the credit card payments again as a business expense.
Perna failed to report additional significant amounts of business income of some $632,000 and then disguised the distribution of that income to himself by mischaracterizing the income as "loan repayments." Finally, he failed to report more than $80,000 of rental income that he received from properties that he rented to tenants.
He was also ordered to pay a $25,000 fine and $455,463 in restitution.
Aiken, South Carolina: Former financial advisor and stockbroker Dennis Wayne Brite has pleaded guilty to tax evasion.
Brite formed multiple holding companies in the Seychelles, Nevis and Belize, and used these companies to transfer millions of dollars out of the U.S. to avoid paying taxes. He shuttled money between accounts at banks in Belize and the islands of St. Vincent and the Grenadines to avoid reporting.
Between 2013 and 2018, he failed to account on his income tax returns for the more than $2.5 million held overseas.
He faces up to five years in prison, as well as a fine of up to $100,000, restitution and three years of supervision after imprisonment.
Liberty, Texas: Teletshia Elice Randolph has pleaded guilty to aiding and assisting in the preparation of a false return and has been sentenced to 30 months in prison.
In 2019, IRS agents began noticing a pattern of questionable tax forms filed in previous years associated with an IP address registered to Randolph. She did not have a registered PTIN and was suspected of being a ghost preparer.
Investigation also revealed that Randolph operated an illegal tax prep business from her residence. Randolph would meet and communicate with clients and obtain information to file, then create fraudulent tax documents indicating the tax filers owned farm equipment and animals and were entitled to deductions. She kept some 15% of each fraudulent return.
Randolph filed 542 tax returns on behalf of 282 taxpayer clients for 2016, 2017 and 2018. The estimated tax loss has approached $6 million.
Cleveland: Financial planner Rao Garuda has been sentenced to 20 months in prison in connection with promoting an illegal tax shelter involving false charitable deductions.
Garuda was the president and CEO of Associated Concepts Agency, where he promoted a fraudulent shelter known as the "Ultimate Tax Plan" or the "Advanced Legacy Plan" that was organized, marketed and sold by a co-conspirator, Michael Meyer. They marketed the scheme as a way for high-income clients to claim deductions for charitable donations that the organizers knew were fraudulent.
Garuda and others promoted the scheme as a way for clients to receive the deduction without relinquishing ownership or control over the assets the clients purported to have donated. He continued to sell the scheme despite several attorneys' warnings that it was illegal. Garuda also helped clients backdate documents so that clients could claim purported donations on their prior years' returns.
In 2018, the Justice Department filed against Meyer, seeking to enjoin him from continuing to promote the Ultimate Tax Plan. As part of that litigation, the Justice Department also subpoenaed Garuda's clients. Garuda created false, backdated documents and directed clients to submit them to the Justice Department. In 2019, a federal district court permanently enjoined Meyer from organizing, promoting, marketing or selling the Ultimate Tax Plan.
Garuda was also ordered to serve three years of supervised release and to pay $1,506,399 in restitution.
McAllen, Texas: Three sisters have pleaded guilty to conspiracy to aid and assist in preparing and filing fraudulent federal returns.
Maria Lourdes Campos was the owner and operator of Campos Tax Service for more than 10 years. Employed there were her two sisters, Elizabeth Romo and Gloria Romo. With the sisters' assistance, most CTS clients fraudulently applied for and claimed either residential energy credits, business expenses or childcare credits to inflate refunds. Once CTS employees completed the returns, they did not review the completed documents with their clients and only provided them with refund amounts or incomplete documents.
From 2018 to 2020, CTS filed some 6,501 federal income tax returns that included more than $5 million of residential energy credits. The fraudulent filings between Campos, Elizabeth Romo and Gloria Romo resulted in a tax loss of $3,672,472.
Sentencing is Aug. 27. Campos and Elizabeth Romo face up to five years in prison; Gloria Romo faces up to three years. Each also faces a possible $250,000 fine.
Boise, Idaho: Ernesto Garibay Garza, of Alamo, Texas, has pleaded guilty to extorting agricultural workers and to tax fraud.
Garza worked as a supervisor and foreman of farm workers at FDC, an agricultural services company that operates in Idaho and that employed H-2A agricultural workers each year from approximately March to November. (The program allows U.S. employers to bring foreign nationals to the country to fill temporary agricultural jobs that can't otherwise be filled.)
Between at least 2005 and 2019 and while a supervisor and foreman, Garza was responsible for preparing and submitting payroll timesheets for the workers based on the number of hours worked. Between at least 2014 and 2019, Garza charged certain agricultural workers a flat fee to work at FDC under the H-2A program, with the fee ranging from some $750 to $2,500. Garza charged the fees without FDC's knowledge or approval and the agricultural workers paid the fees to Garza each year because they feared they would be fired or not allowed to return to FDC under H-2A if they didn't pay.
Between 2013 and 2019, Garza also deposited some $493,153 in unreported income into his personal bank accounts, in part from extortion and in part from a separate scheme to defraud the farm. He did not disclose the additional income on his return for those years.
Sentencing is July 18. He faces up to 20 years in prison.
