Living on borrowed time; seed money; two down; and other highlights of recent tax fraud cases.
Ringgold, Louisiana: Tax preparer Angelena Adams, a.k.a Angelena Morris, 52, of Princeton, Louisiana, has been sentenced to 27 months in prison and a year of supervised release for defrauding the IRS.
Adams, who pleaded guilty in March, worked in a tax prep business from 2008 through 2015. Beginning in 2012 and continuing through 2015, she opened and operated Angie’s Tax Service. The business income from Angie’s was deposited into her personal bank account.
Adams did not report the income from the business on her 1040 for tax years 2013, 2014 and 2015. Around October 2014, Adams completed and filed a false return for tax year 2013 stating that her adjusted gross income was $166,011; it was substantially more than that, with gross receipts totaling $702,855 during 2013 for tax prep.
Adams was also ordered to pay $188,328 in restitution.
Prairie Village, Kansas: Joel Jerome Tucker has been sentenced to 12 years and six months in prison for engaging in two frauds related to millions of dollars in false payday loan debt and for tax evasion that totaled more than $8 million.
Tucker, working through various companies, serviced payday loan businesses. His company names changed over the years; the primary company was eData Solutions, which did not make loans directly to borrowers but collected loan application information, referred to as leads, and sold those leads to some 70 payday lender clients. eData also provided software for payday lenders.
Tucker and the other owners of eData sold the company to the Wyandotte Indian tribe in 2012. Tucker still maintained a file of 7.8 million leads he had acquired through eData, and used them to create false debt portfolios. Tucker received as much as $7.3 million from the sale of false debt portfolios in just two years, among other offenses.
In April 2014, the Tax Court entered a decision that Tucker owed tax deficiencies from 2007 and 2008. The total amount owed in 2014 with interest and penalties was $8,057,079.95. For tax years 2014 to 2016, neither Tucker personally nor any of his companies filed federal tax returns. He now owes some $12 million in taxes, interest and penalties for 2007 through 2014.
Tucker told IRS agents that he had no income and was living on borrowed money, including from his mother; bank accounts showed that Tucker sent money to his mother rather than borrowed from her. He used nominee bank accounts to conceal income and assets and spent hundreds of thousands of dollars on such personal expenses as vehicles, chartered jets, travel and entertainment and a residence.
Tucker, who pleaded guilty in 2020, was also ordered to pay $8,057,079 in restitution to the IRS and to forfeit $5,000 to the government.
Watertown, South Dakota: Businessman Dean Minnerath has been sentenced to 30 months in prison and a year of supervised release for filing a false return.
Minnerath, who pleaded guilty in January, owned and operated Discount Seeds Inc. and understated his income on his 2014 income tax return by claiming personal expenses as business expenses. He failed to include more than $1 million in income, owing additional income tax of $404,445.
He agreed to pay additional income tax he owed for tax years 2009 through 2013. By the time of the sentencing, Minnerath had paid $1,358,990 in income tax. He must also pay a $50,000 fine, $1,358,990 in restitution and a $100 assessment.
Pemberton, New Jersey: John Barry Jr. has been convicted of conspiring with individuals in four other states in a “mortgage recovery” tax fraud and for assisting in the filing of false returns, among other tax offenses.
From March 2015 through 2016, Barry and his conspirators told clients that they could extinguish their outstanding mortgage debts by obtaining refunds. Barry and his conspirators filed forms with the IRS that fraudulently claimed that financial institutions had withheld and paid over substantial taxes on behalf of Barry’s clients, even though no such payments had occurred. Barry then directed clients to file false returns that claimed significant refunds based on the bogus withholdings.
These false withholding claims caused the IRS to issue more than $3 million in refunds. Barry typically charged each client a fee of 20 to 35 percent of the refund, then split fees with some conspirators.
He also did not file his own 2016 return despite earning more than the filing threshold, nor did he report or pay taxes on the income from the scheme in that tax year.
Sentencing is Dec. 1, when he faces a maximum of five years in prison for conspiracy to defraud the IRS, three years for each count of aiding and assisting the filing of false returns, three years for obstructing the internal revenue laws and one year for failing to file a return.
Durham, North Carolina: Tax preparer Audrey Renetta Odom has been sentenced to 15 months in prison for conspiring to defraud the IRS.
From 2012 through 2016, Odom conspired with Karen Jones and Andrea Pasley to prepare false returns for clients. The returns fraudulently claimed false education credits or dependents or manipulated clients’ income to qualify for larger Earned Income Tax Credits.
Odom admitted that some clients were charged up to $2,000 for preparing returns. Based on an analysis of the falsely claimed education credits, the tax loss exceeds $1.2 million.
Jones previously pleaded guilty and
Odom was also ordered to serve three years of supervised release and pay some $1,239,847 in restitution to the United States.
Fort Worth, Texas: Former IRS revenue officer Sonya Vivar has been sentenced to three years in prison for obstructing federal tax laws.
She pleaded guilty in November and admitted attempting to conceal her personal relationship with C.J.B., the subject of an IRS investigation. C.J.B. was operating a business that was delinquent on its employment taxes and had purchased the company only after Vivar was assigned to oversee collection efforts against it. Vivar was aware that C.B.J. had acquired the company and sold its assets at a profit or transferred the assets into newly formed business entities.
Authorities said the IRS lost the chance to collect more than $4 million in taxes.
Washington, D.C.: Tax preparer Brittany Patterson, of Jefferson Parish, Louisiana, has pleaded guilty to a conspiracy to defraud the United States.
From January through April 2015, she and others conspired to file false returns for clients of Pelicans Income Tax and Payroll Services, a tax prep business in Kenner and Westwego, Louisiana. Patterson and others prepared returns reporting false income and withholdings. Patterson also filed a return for herself that claimed a false dependent, after obtaining the dependent’s personal ID information from a client without the client’s knowledge.
Patterson and her conspirators caused a total federal tax loss exceeding $550,000.
Sentencing is Jan. 5. Patterson faces a maximum of five years in prison, as well as a period of supervised release, restitution and monetary penalties.
In November 2019, Patterson pleaded guilty to a conspiracy to defraud the U.S. for filing false returns for clients of another tax prep business, Crown Tax Service. She was scheduled to be sentenced on Aug. 5 for that case.
Syracuse, New York: Tax preparer Phoenix Phan, 62, has pleaded guilty to filing a false return for herself and to aiding and abetting the filing of a false return.
Phan admitted that she failed to report gross receipts on her personal income tax returns for tax years 2013 to 2017. She also admitted that she aided and assisted others in filing false federal income returns during the same time, including by falsely reporting business income that the taxpayer did not earn, rental losses and inaccurate filing status.
Sentencing is Nov. 30. Phan faces up to three years in prison on each count, as well as supervised release of up to a year. Phan faces a fine of up to $100,000 on each count. She agreed to pay at least $222,999 in restitution to the IRS.
