Confidence man; Bits & Bytes & busted; lost that bet; and other highlights of recent tax cases.
Chambersburg, Pennsylvania: Tax preparer Guibbonz Marcellus, 42, has been convicted of 23 counts of aiding and assisting in the preparation of fraudulent returns.
He operated M&M Confident Multi Services from 2013 to 2016. To increase refund amounts and generate business, Marcellus regularly included false numbers on the returns he prepared and filed. The returns falsely claimed, among other things, the federal fuel-tax credit, business losses and deductions for charitable gifts and unreimbursed employee expenses.
The maximum sentence for each count is three years in prison, a term of supervised release following imprisonment, and a fine.
Omaha, Nebraska: Business owner Jeffrey Stenstrom has been sentenced to 30 months in prison for income tax evasion and 78 months for conspiracy to commit money laundering, to run concurrently.
Stenstrom owned and operated Stenstrom Services Inc., a commercial remodeling and repair business, from 2006 through about 2021. Brett Cook was the vice president of Darland Properties, where he negotiated prices for work to be completed on properties managed by Darland Properties and authorized payments from the real estate trust accounts of Darland Properties' clients. Stenstrom had been in a decades' long relationship with Cook, who is now dead.
Beginning around 2015, Cook used his position to direct repair work to SSI, which performed no skilled labor and had no employees; most of the work SSI performed on behalf of Darland was subcontracted. Cook was the initial point of contact for many of the subcontractors and directed the subcontractors that all work must be run through SSI.
Cook and Stenstrom used SSI to fraudulently obtain money from Darland's clients by causing SSI to bill for work that was not performed, overbilling and causing SSI's inflated invoices to be submitted to insurance companies.
In May 2018, the IRS assessed $1,725,532.91 related to unpaid income tax owed by Stenstrom. That December, Stenstrom provided a signed 433-A that omitted numerous assets he owned that were being held in the name of a third party. In 2019, the IRS placed a tax levy on Stenstrom's accounts.
Cook and Stenstrom ceased directing work to SSI and began directing it to Midwest Property Maintenance Solutions, which had been created by Cook and one of his family members. Cook, his family member and Stenstrom used Midwest to scam Darland's clients by billing for work that had previously been completed by SSI, billing for work that was not performed, billing for warranties it didn't provide and were previously paid for by Darland' clients, and overbilling for work that was done.
The proceeds from the wire fraud were commingled with legitimate funds. The scheme was concealed by laundering the proceeds through various business and personal bank accounts, purchasing and selling various assets, and subsequently using those proceeds to acquire additional assets. In total, the scheme resulted in more than $5.1 million being stolen from Darland's clients.
After his release from prison, Stenstrom will serve two years of supervised release. He was also ordered to pay $5,146,816.51 to victims and $1,954,505.10 in restitution to the IRS. He will forfeit a sports car, two homes and two commercial properties, nearly $2.2 million in life insurance policy money, some $74,743.00 in currency, and multiple items of jewelry and luxury watches.
Jacksonville, Florida: Tax preparer Iona Coates of Orange Park, Florida, has pleaded guilty to aiding and assisting in the preparation of a false return.
Coates owned and operated Bits & Bytes Accounting Services, where between 2015 and 2020 she reported wages and withholdings from Bits & Bytes on her personal tax returns, including $42,500 of withholdings on her 2017 return. Coates knew, however, that her business did not withhold and pay over any taxes to the IRS during those years.
In total, between 2015 and 2020, Coates claimed false withholdings of $228,788.
She faces up to three years in prison, a period of supervised release, restitution and monetary penalties.
Guymon, Oklahoma: Resident Lizbeth Saenz Longoria has been sentenced to 15 months in prison for aiding or assisting in the preparation of false returns.
Longoria, who pleaded guilty in January, included some $13,299 worth of medical or dental expenses on a person's 1040 for 2017 despite knowing that the individual had no medical or dental expenses near that amount for the year.
The judge took into account relevant conduct by Longoria that included 116 additional false returns, and ordered her to pay $291,520 in restitution to the IRS.
Joplin, Missouri: Business owner Karen Lauridsen has been sentenced to 14 months in prison and ordered to pay $242,251 in restitution to the IRS for delinquent employment taxes.
Around 2003, Lauridsen and another individual purchased a company with Lauridsen as the president. Beginning in the fourth quarter of 2011, the company became delinquent on both the trust fund and employer portions of its employment taxes.
The IRS began collection efforts, including an in-person meeting between Lauridsen and a revenue officer in 2017. Lauridsen admitted to the officer that she was responsible for paying the company's employment taxes but she did not pay the balances due. In January 2018, the IRS began levying the company's bank accounts as well as its customer payments, with limited success.
During the time that Lauridsen ceased paying the employment taxes, she frequently gambled at casinos in Kansas, Mississippi, Missouri, Nevada and Oklahoma despite IRS collection efforts and its criminal investigation.
The company incurred a federal employment tax liability of $242,251, which Lauridsen, who pleaded guilty in November, was ordered to pay as a part of her sentence.
Louisville, Kentucky: Krlos Hidalgo and Esther Baldeon have been sentenced to eight months in prison for preparing false returns.
The couple added false dependents to their clients' returns, generating undeserved additional child tax credits.
Hidalgo and Baldeon were also each sentenced to a year of supervised release and agreed to surrender to the IRS $127,015 seized during the investigation.
Jacksonville, Florida: Christopher Leo Daragjati has pleaded guilty to two counts of wire fraud, two counts of aggravated ID theft, and one count of theft of government property.
Daragjati obtained the personal ID information of multiple victims. In July 2022, the local sheriff's office began investigating an unknown individual, later identified as Daragjati, using stolen IDs to commit fraud. Using the stolen IDs, Daragjati opened commercial lines of credit with a local rental company. After renting thousands of dollars of equipment, he pawned or stole the equipment, causing a felony arrest warrant to be issued for an innocent ID-theft victim.
The Florida Highway Patrol, with help from other law enforcement, also determined that Daragjati fraudulently obtained 26 Florida driver licenses and ID cards. Homeland Security determined that Daragjati, using two fraudulently obtained Florida identification cards, applied for three Paycheck Protection Program loans in the ID of two victims; he received some $150,000 in PPP proceeds.
The IRS determined that Daragjati submitted eight fraudulent federal returns using the stolen IDs of six victims. The IRS approved one such refund and Daragjati received more than $3,000 in the identity of the victim.
He faces up to 20 years in prison on each wire fraud count, a minimum penalty of two years in prison for each aggravated identity theft count, up to 10 years in prison on the charge of theft of government property and payment of restitution to the victims. Sentencing is Oct. 26.
