Scale of the crime; a favorite client; with a bullet; and other highlights of recent tax cases.
Hackensack, New Jersey: Tax preparer Joshlyn Raye, 49, of Elmwood Park, New Jersey, has admitted to tax evasion, to helping clients file falsified returns that generated inflated refunds and to filing false declarations on quarterly returns for her tax prep business.
From March 2010 to September 2023, Raye owned JB Tax Services and evaded her personal income taxes over three of those years; she filed 50 false returns on behalf of clients; and filed three false quarterly employment returns on behalf of her business. She used fabricated and inflated figures, including expenses and itemized deductions.
The counts of aiding or assisting in the preparation of a false income tax return and filing a false declaration under penalty of perjury each carry a maximum of three years in prison and a $250,000 fine. The count of tax evasion carries a maximum of five years and a $250,000 fine. Raye has agreed to pay the government restitution of $676,168 and to file amended returns. Sentencing is Aug. 6.
Allen Park, Michigan: Christopher Niebel, 45, a former tax preparer who did business as "Tax Guy Chris," has pleaded guilty today to fraud and ID theft resulting from his participation in a pandemic unemployment insurance fraud.
He pleaded guilty to one count of wire fraud and one count of aggravated ID theft arising out of a scheme in which he used stolen identities to submit fraudulent claims for unemployment insurance.
At the beginning of the pandemic, Niebel owned and operated Tax Guy Chris and worked seasonally as a manager for Party City, a New-Jersey-based retail chain. Through his employment at Party City, which he had held for many years, Niebel had access to the files of individuals who had worked or applied to work at the company, including I-9 forms of employees and applicants. Around 2019, Niebel stole a number of these I-9s for his future use.
Once pandemic unemployment assistance funds became available, he used the stolen information to defraud the Michigan Unemployment Insurance Agency by submitting fictitious claims for those benefits. He intentionally used the information of individuals who were not from Michigan in submitting these claims, surmising that such individuals would be unlikely to have submitted their own unemployment insurance claims in the state, making detection less likely.
He stole some $512,000 in assistance funds and funneled it to bank accounts in Michigan. He spent the money on personal expenses, including food, lodging, lottery tickets and gambling.
Sentencing is May 21. Niebel faces up to 20 years imprisonment on the wire fraud count. The aggravated ID-theft charge carries a two-year sentence of imprisonment that must run consecutively to any time for the wire fraud charge.
Fall River, Massachusetts: Commercial fisherman Rodolfo Membreno has pleaded guilty to evading income taxes.
Membreno worked as a fisherman and deckhand and did not report more than $1.3 million in income between 2013 and 2021. For 2013 to 2019 and again for 2021, he did not file federal income tax returns or pay taxes. In 2020, he filed a return that overstated business expenses; for 2012, he filed a return but paid no tax due.
He caused a total tax loss to the IRS of some $293,118.
Sentencing is May 15, when he will face up to five years in prison as well as a period of supervised release, restitution and monetary penalties.
Encino, California: Tax preparer Bijan Kohanzad, of Calabasas, California, owner of a tax prep company, has pleaded guilty to helping a client file an individual return that deliberately underreported income, admitting that this and other false returns for the same client caused a loss to the IRS of more than $400,000.
From 2015 until May 2017, Kohanzad helped and counseled a client to reduce taxable income by falsely increasing the client's business expenses. On the client's corporate tax return for 2015, the client's company claimed $150,000 in advertising expenses, which Kohanzad knew was false. This claim reduced the company's ordinary business income from more than $326,000 to more than $176,000.
In September 2016, Kohanzad also helped and advised the same client to file a false individual 2015 income tax return on which the client failed to report some $150,000 in concealed income that the client had received through his company. The client's personal tax return falsely reported a taxable income of $127,878 when the actual amount exceeded $278,000.
For tax year 2016, Kohanzad admitted that he again prepared and filed corporate and individual income tax returns for the same client. The 2016 corporate tax return falsely claimed $886,325 in business expenses, which reduced the company's reported ordinary business income, and fraudulently reduced the client's taxable income as reported on his individual tax return from more than $1.3 million to less than $450,000.
The loss Kohanzad caused to the IRS for these tax years totaled some $401,436.
Sentencing is July 12, when he will face up to three years in prison.
Rapid City, South Dakota: Businessman Asher Wagh, of Nanuet, New York, has been convicted of failure to withhold, properly account for and pay over tax.
Between 2015 and 2017, Wagh was a co-owner and the sole manager of Captech International, an ammunition component manufacturing company, responsible for withholding, accounting for and paying over federal payroll taxes. Between 2015 and 2017 he withheld the payroll taxes from employees' paychecks and failed to pay over the taxes to the IRS. Wagh used at least a portion of the withholdings for his personal use.
He was sentenced to 14 months in prison to be followed by two years of supervised release and ordered to pay a $100 special assessment, as well as $273,766.98 in restitution to the IRS. He pleaded guilty in October.
Cuyahoga Falls, Ohio: Tax preparer Lateesha Black, of Hudson, Ohio, has been sentenced to a year and a day in prison and ordered to pay $114,022 in restitution to the IRS after previously pleading guilty to aiding or assisting in filing a false return and corrupt endeavor to obstruct and impede the administration of the internal revenue laws.
Black owned and operated Ideal Accounting Solutions. Over the course of several years, she prepared and e-filed several false returns for clients that claimed false Schedule C net losses, income and expenses to inflate refunds.
In 2019, IRS agents interviewed Black regarding Ideal's tax prep activities and served her with a summons for business records. To conceal her fraud, Black requested to meet with multiple clients and had them sign false and, in some instances back-dated, working papers to substantiate the false Schedule C information.
Black was also fined $15,000.
Minneapolis: Tax preparer Joseph Korha, formerly of North Dakota, has pleaded guilty to five counts of preparing false returns for clients.
Korha worked as a tax preparer for a business in Phoenix and in 2019 prepared and submitted more than 100 fraudulent returns for clients, many in the Fargo, North Dakota, area. He claimed false credits and fictitious business profits and losses on these returns, inflating refunds.
He caused a tax loss to the IRS totaling some $294,000.
Sentencing is June 3, when Korha will face up to three years in prison for each count of filing a false tax return. He also faces a period of supervised release, restitution and monetary penalties.
