Family affairs; Ultimate crime; level effects; and other highlights of recent tax cases.
Kenner, Louisiana: Preparer Michegel Butler has been sentenced to two years in prison for conspiring to defraud the U.S.
He owned the prep business Crown Tax Service and in early 2013 conspired to defraud the U.S. by preparing returns that fraudulently inflated clients’ refunds. Some of the returns included false Schedule C business income and expenses, dependents and dependent care expenses. To substantiate the false income and expenses, Butler and others directed clients to create bogus receipts.
He caused more than $100,000 in tax losses.
Butler, who previously
Shrewsbury, Massachusetts: Linda Le has pleaded guilty to lying about her role with a Worcester-based employment agency while testifying before a federal grand jury.
In late 2017 and early 2018, Le assisted with the transition of several client companies from one employment agency to UT Services, a Worcester, Massachusetts, employment agency. Le later performed various tasks on behalf of UT Services, including reviewing and analyzing client invoices and maintaining a spreadsheet that tracked invoice amounts and profit. Le received cash for her work for UT Services.
In May 2018, she testified before a federal grand jury and falsely stated under oath that she did not know anyone who was involved with UT Services and did not know anything about a specific client company using temporary workers from UT Services. Ten months later, Le testified again before a federal grand jury and falsely stated under oath that she did not know anything about UT Services and that she did not have any role with UT Services. At the time, investigators were looking into fraudulent UT Services tax filings and insurance audits.
Sentencing is May 25. Lying to a grand jury provides for up to five years in prison, three years of supervised release and a fine of $250,000.
Erie, Pennsylvania: Resident Chamere Henderson has pleaded guilty to charges of conspiracy to defraud the government and false claims against the U.S.
Between February 2012 and March 2013, Chamere Henderson conspired with her sister, Chamelle Henderson, to file false federal returns for three others to obtain federal tax refunds to which she and her sister were not entitled. The refunds were wired into a bank account to which her sister had access. Chamere Henderson also filed false federal tax returns for two other individuals to obtain inflated federal refunds.
Sentencing is June 7. The law provides for a total sentence of 20 years in prison, a fine of $750,000 or both.
Rocky Mount, North Carolina: Preparer Adrienne Williams has been sentenced to 50 months in prison for conspiring to defraud the U.S.
Between 2009 and 2017, Williams, who previously
In all, Williams and her co-conspirators sought to defraud the federal government of more than $3.5 million.
She was also ordered to serve three years of supervised release and pay $4,830,723 in restitution to the IRS.
Columbus, Ohio: Theresa R, Gregory, 67, of Mount Vernon, Ohio, has been sentenced to three years in prison for evading the assessment and payment of federal income tax. Her daughter, Tera L. Gore, 44, of Croton, Ohio, was sentenced to six months in prison to be followed by a year of home confinement on the same charges.
Between January 2009 and December 2017, Gregory and Gore evaded the assessment and payment of income taxes owed to the IRS by Gregory, who earned millions of dollars annually. They worked together to hide Gregory’s income and assets and falsified documents to help Gregory purchase a second home in Florida, including a bank statement that claimed a bank account held nearly $2 million more than it actually did.
Since the 1990s, Gregory has earned income from multilevel marketing companies, including commissions and bonuses based on the volume of products she sold as well as the volume of products sold by others she recruited to be part of her distributor network. By 2012, her annual income exceeded $900,000. In each subsequent year, Gregory’s annual income exceeded $1 million and in at least one year exceeded $4.5 million. Between January 2009 through December 2017, Gregory earned some $17,498,680.55 in gross income from the multilevel marketing companies.
Gregory failed to voluntarily file personal income tax returns and has paid no personal income taxes (other than W-2 withholdings) for more than 20 years. Dating back to at least 1993, she has been the subject of several IRS civil examination and collection proceedings; the IRS conducted audits, filed substitutes for return and filed tax liens. It also notified Gregory of her ongoing obligation to file returns for more recent years.
Gregory and Gore concealed the former’s income and assets from the IRS by systematically moving assets, including businesses and bank accounts, out of Gregory’s name and into Gore’s. The pair directed income owed to Gregory to entities and accounts nominally in the control of Gore.
Gregory retained control of the funds received from the multilevel marketing companies. She spent the money on lavish personal expenses, including home furnishings and home improvements, at high-end retailers such as Louis Vuitton, Jimmy Choo, Saks Fifth Avenue and Nordstrom, and on cruises, horse dealers, quarter-horse events, custom horse show clothing, gifts for Gore and other family members, mortgage payments on a house in Florida, and at various automotive dealerships.
Gore had bank cards for the bank accounts in her name and used them for a substantial amount of personal expenses for herself and her family. Gregory also authorized the use of funds to purchase and subsidize a feed store and for operation of an equestrian training center and wedding venue that Gore operated. Gregory also authorized the use of funds to pay a private tutor and horse trainers for Gore's daughter and for others who provided personal services to Gore. The two also worked together to alter, falsify and forge financial and other business documents relative to Gregory’s purchase of a second home in Grand Island, Florida, for $1,115,000. Gregory financed a portion of the purchase with a seller-backed mortgage to avoid any requirement to disclose returns in making the purchase and lied to the real estate agent about her funds available.
The combined total tax loss for the 1998 through 2006, 2008 and 2014 through 2017 income tax years was $3,759,889.11.
Both pleaded guilty in August. They were also ordered to pay $3.3 million in restitution, and Gregory was ordered to pay a $20,000 fine.
Anderson, California: Preparer Deborah Gwen Orrey has pleaded guilty to making and subscribing a false return.
Orrey owned and operated Affordable Tax, Bankruptcy and Bookkeeping and from 2014 to 2017 submitted falsified returns to the IRS for her own returns and for those she filed for clients.
Orrey owed the IRS an additional $112,083. She split the refunds due to her clients without her clients’ knowledge, directing a portion of the refunds to her bank account. Eight of her clients suffered an actual loss of a total of $3,729.
Sentencing is May 18, when Orrey faces a maximum of three years in prison and a $100,000 fine.
