Penmanship; lost in Processing; tiki testimony; and other highlights of recent tax cases.
Anaheim, California: Tax preparer Sandra Pineda, 37, has pleaded guilty to an unemployment insurance scam during the pandemic, according to news reports.
Pineda was accused of filing bogus unemployment claims for an inmate who was in state prison since 2010 for murder, prosecutors told news outlets, as well as for three other prisoners. Pineda used personal ID information to file false unemployment claims and then used debit cards to withdraw money, prosecutors said.
She pleaded guilty to 72 felony counts that included perjury, false statement, conspiracy and money laundering. Sentencing is May 19.
Chicago: Resident Elvin Marks has been sentenced to 41 months in prison for mail fraud and fraudulent claims to an agency of the federal government.
From 2016 through 2018, Marks schemed to defraud the IRS to obtain money through the mail. He prepared 1040s or 1040Xs that included fraudulent information concerning wages, earnings and deductions to obtain undeserved refunds for himself and others; Marks received the refunds in Florida.
For instance, on a 1040X for 2015 he claimed a refund for $99,960 in the name of another person, which the IRS rejected. Marks also made and sent to the IRS a falsified 1040 for 2017 in his own name requesting a refund of $4,606,144. The IRS mailed his refund to a residence in Florida. The IRS recovered $3,994,611.85, a loss of $606,309.35.
Marks, who pleaded guilty in November, must also forfeit the latter amount.
Fargo, North Dakota: Thompson B. Tarr, 43, has pleaded guilty to aiding and assisting in the preparation and presentation of a false and fraudulent return.
Tarr prepared or assisted in the preparation of hundreds of returns for individuals. IRS investigators discovered 30 other false returns prepared by Tarr for 13 taxpayers, which resulted in the tax loss from false deductions and credits of $105,474.
Sentencing is Aug. 7.
Downey, California: Tax preparer Raudel Sandoval, 48, of Placentia, California, has pleaded guilty to preparing nearly 400 returns that caused a tax loss of more than $750,000 by inflating clients' refunds without their knowledge and then pocketing the difference between the true refunds and the inflated ones.
Sandoval, who owns the tax prep firm RSE Sandoval España Inc., prepared hundreds of false federal and state income tax returns for clients for the tax years 2015 through 2018. On these returns, he claimed false or inflated amounts of the Child Tax Credit, business losses, short-term capital losses and other items to which the clients were not entitled. Sandoval falsified the returns with deductions and credits that his clients did not incur or had not informed him about. He also inflated the deductions and credits that his clients were entitled to claim.
When he finished preparing a return, Sandoval gave his clients copies of their federal returns that were true but falsely told them that he would file those correct copies. He then inflated clients' returns with false deductions and credits and filed these returns with the IRS. He changed bank account and routing numbers on the filed returns to an account he controlled.
He controlled more than 100 bank accounts with several different banks and opened many of the accounts in his clients' names; several of the Sandoval-owned accounts had the name "Federal Tax Refund Processing." He directed the IRS to send the inflated refunds through a third-party refund processor to be deposited into an account he controlled. Other times, he caused the IRS to mail a check of the inflated refund to his business address and deposited the check.
After receiving the inflated refund, Sandoval transferred a portion of it — the amount his clients were expecting to receive based on the true-and-correct return copies — to one of his "Federal Tax Refund Processing" accounts. He then transferred that money to his clients' bank accounts, causing them to believe their refunds were from a legitimate government source, and kept the difference.
For 2015 through 2018, Sandoval cost the IRS $758,550 by filing at least 389 fraudulent income tax returns.
Sentencing is Sept. 6. He faces a maximum of three years in prison for each count.
Ewa Beach, Hawaii: Michael and Brigida Chock have pleaded guilty to conspiring to defraud the U.S. by obtaining a fraudulent refund and thwarting IRS efforts to recoup it.
The couple conspired with a third individual to prepare a false 1040X for 2014 and a false 1099-MISC purportedly issued by a mortgage lender to Michael Chock. The return, filed in 2016, falsely reported an inflated withholding based on the fraudulent 1099-MISC, resulting in a refund of $225,327.
The Chocks took several steps to obstruct IRS efforts to recover the refund, including depositing the check into a bank account in the name of a trust they created to conceal the refund and by paying the conspirator $73,500 for helping obtain and hide the refund. They also lied to the IRS that they'd prepared the false return themselves.
Each faces a maximum of five years in prison, a period of supervised release, restitution and monetary penalties.
El Dorado Hills, California: Brian and Denae Beland have been found guilty of trying to dodge federal income taxes.
Brian Beland has been found guilty of three counts of filing false returns for tax years 2011, 2012 and 2013. They have both been found guilty of corruptly impeding their tax audit.
Brian Beland was a mortgage broker for Wells Fargo and then Bank of America from 2011 through 2013; Denae Beland is an attorney. He claimed business expenses of more than $800,000 for all three years, effectively paying only a 2% tax on the more than $1.1 million he earned.
When the IRS began auditing their taxes, the couple falsely claimed that personal expenses were business expenses, lying to the civil examiner and not providing requested documents. For the audit, the Belands, claiming their business records had been shredded or lost, recreated spreadsheets of their business expenses that listed various items as business expenses that were actually personal expenses, including travel to Europe, Hawaii and Cancun; wine racks and a personalized wine bottle in their wine cellar; a California king bed; patio furniture; automated tiki torches; birthday party and baby shower expenses; home gym exercise flooring; and other items.
In 2016, the IRS executed a search warrant at their home and, in addition to finding many pieces of furniture and household goods that had been claimed as business expenses, found tax records and receipts despite the Belands' claims that all records and receipts had been destroyed.
Sentencing is June 20. Brian Beland faces a maximum of three years in prison and a fine of up to $100,000 for each count of filing a false return. They each face a maximum of three years in prison and a fine of up to $5,000 for corruptly endeavoring to impede the tax audit.
Scottsdale, Arizona: Ryan C. Patterson, 34, has been sentenced to 20 months in prison, to be followed by three years of supervised release, for tax evasion.
Patterson, a contractor, directed his customers to make out checks to him personally and deposited the checks into his personal checking accounts. He failed to report $1.9 million in income and avoided nearly $550,000 in taxes.
He also reported a loss of $38,000 in 2016 while purchasing a primary residence for $445,000 in cash and making other lavish expenditures.
Patterson, who was
