Tag, you’re it; daddy’s little nominee; across state lines; and other highlights of recent tax cases.
Lake Placid, Florida: Tax preparer Benny Aguilar, 49, has been sentenced to 37 months in prison for filing fraudulent federal returns.
Aguilar owned and operated the prep business B&A Services, and from about 2014 through 2018 filed fraudulent returns for clients seeking undeserved refunds by reporting fictitious residential energy credits and inflating federal withholdings. For each of the years, Aguilar submitted some 2,235 returns claiming residential energy credits.
His fraudulent returns resulted in a loss to the IRS of $2,988,702.
Aguilar was also sentenced to a year of supervised release and ordered to pay $92,230 in restitution.
Providence, Rhode Island: Gladys Rossi, sole owner and operator of R.I.J. Inc, a company that affixes price tags to jewelry for other companies, has admitted to failing to disclose more than $1.2 million in gross revenue and failing to pay more than $400,000 in federal taxes for tax years 2012 through 2015.
During those years, Rossi paid employees under the table and failed to maintain or prepare business records that tracked expenditures, gross and net income, profits and dividend disbursements. IRS investigation revealed that business and personal returns filed by Rossi failed to report income totaling $1,226,707.21, resulting in an underpayment of taxes of at least $407,767.
She pleaded guilty to two counts of filing a false tax document and will be sentenced on Jan. 12. She will pay full restitution to the IRS, including back taxes and interest.
Hopkins, Minnesota: Businessman Daniel Berglund has been convicted of tax evasion after failing to file income tax returns since 1997.
Between about 1987 and 2017, Berglund was the owner and sole employee of Faith Software, where he worked as a computer language instructor. Despite earning a substantial annual income, Berglund has filed no individual income tax returns since 1997 and never filed a corporate tax return of any kind on behalf of the company.
He took numerous steps to hide his income from the IRS, including giving his clients a fabricated tax identification number to prevent their payments from being reported to the IRS as income attributable to him; depositing clients’ payments into accounts where the funds wouldn’t be traceable to him; and converting his income into silver that he stashed in concealed locations in his home.
Berglund's evasion resulted in a total tax debt of some $146,806.
He faces up to five years in prison and a fine up to $250,000 per count.
Dallas: Bruce Bise and Samuel Mendez, owners of a cryptocurrency company, have pleaded guilty to tax evasion.
Bise and Mendez admitted that their company, Bitqyck, raised some $24 million from more than 13,000 investors. The two used Bitqyck funds on personal expenses, including casino trips, cars, luxury home furnishings, art and rent.
In marketing materials, the pair promoted the company’s cryptocurrency, Bitqy, as a way for “those individuals who missed out on Bitcoin” to get rich. In an attempt to legitimize Bitqy tokens — and to avoid scrutiny over selling unregistered securities — the company characterized the cryptocurrency as an “earned gift” that rewarded consumers for certain internet purchases. Bise and Mendez also promised common stock in the company that they never delivered and falsified claims about virtual currency mining.
From 2016 to 2018, Bise and Mendez raked in roughly $9 million combined. For 2016 and 2017, Bise underreported his income to the IRS, resulting in a tax loss of $371,278. For that same period, Mendez underreported his income to the IRS, resulting in a tax loss of $311,155. In 2018, Bitqyck failed to file any corporate tax returns at all despite netting more than $3.5 million from investors.
The total tax loss is more than $1.6 million. Both men face up to five years in prison.
The guilty pleas come on the heels of a civil settlement with the Securities & Exchange Commission in which Bitqyck agreed to pay an $8.3 million penalty to resolve claims that it defrauded investors and operated an unregistered digital asset exchange. In that case, Bise and Mendez agreed to pay disgorgement and penalties totaling more than $1.7 million.
Durham, North Carolina: Tax preparer Nicholas Laws has been sentenced to 33 months in prison for assisting in the preparation of a false return and for filing a false personal income tax return.
Laws was an office manager and a preparer in the Winston-Salem branch of Tax Mind. He trained and supervised other preparers, reviewed returns and filed returns.
From 2014 to 2019, Laws prepared fraudulent returns for clients that reported false wages and business income. He also edited some returns prepared by other Tax Mind preparers to include similar fraudulent information.
Laws also filed a false personal income tax return for 2014 and did not file returns reporting his income for 2015 through 2019. He intended to cause a federal tax loss of $2,934,891.
He was also ordered to serve a year of supervised release and pay some $184,072 in restitution to the United States.
Duluth, Minnesota: Businessman Shimon Shaked has pleaded guilty to tax evasion for failing to report his business revenue and income to the IRS.
Between June 2019 and April 2020, Shaked owned and operated several T-shirt and souvenir shops in Duluth's Canal Park tourist zone under a holding company called ALMS18, which he formed in 2012. Although Shaked owned, operated and controlled ALMS18, he listed his teenage daughter as the nominal owner to evade taxes on income he received from the company.
In 2017, Shaked opened another souvenir store, in Marquette, Michigan, operated under the name SkyMqt.
Shaked evaded taxes by failing to report the full revenue of the stores and income to the IRS. He reported the credit card sales for his stores, for example, but failed to report or pay taxes on most of the cash sales. He also used the cash from the unreported sales to pay personal expenses and to pay some of his employees’ overtime wages, in the latter case failing to account for and pay over some or all of the required federal payroll taxes.
Shaked evaded a total of some $620,362 in taxes. Sentencing is Feb. 15.
Oklahoma City: Business exec Christina Rochelle Anglin, a.k.a. Christy Anglin, of Burnsville, North Carolina, has been convicted of employment tax fraud.
Anglin was the controller and CFO for Atmospheric Technology Services Company in Norman, Oklahoma. From the first through the third quarter of 2018, Anglin did not pay to the IRS nearly $920,000 in payroll taxes that had been withheld from employees. At the same time these taxes were not paid, she approved thousands of dollars of business expenditures, including salary and bonuses for herself and other executives.
Anglin faces a maximum of five years in prison for each count of employment tax fraud, plus payment of restitution to the IRS.
Springfield, Massachusetts: Cory Kizer, 39, of Florida, has been sentenced to 15 months in prison and two years of supervised release for tax offenses.
Earlier this year, Kizer pleaded guilty to one count of conspiracy to commit wire fraud and eight counts of theft of public money.
He obtained personal ID information to file false federal returns and obtain unwarranted refunds. The returns contained false addresses, wages and salaries, employers, dependents, business and loss information. The false returns generated more than $550,000 of unwarranted tax refunds.
