Mr. Coins; a whole book of numbers; lack of horse sense; and other highlights of recent tax cases.
Evansville, Indiana: An undercover IRS agent posed as a crypto trader to trick a dark-web drug dealer into forking over $180,000 to the agency before they arrested him, according to published reports.
Under the username “Mr. Coins,” the agent built a reputation on crypto-for-dollars trading site LocalCryptos, reports said, adding that Mr. Coins put up a listing offering to buy Bitcoin at a premium in cash by mail, shortly attracting a bid from a user called “Lucifallen21.”
Lucifallen21 turned out to be an Indiana man (since arrested) with whom the undercover agent reportedly developed a relationship and who bought thousands of dollars of Bitcoin and other virtual currency for cash. News outlets added that the buyer initially boxed more than $15,000 in clothing-wrapped physical bills and mailed them to Mr. Coins, adding that more cash payments followed. Later the buyer revealed that he was involved in trafficking “pills and opioids” and cocaine on the dark web, according to news reports.
IRS agents were reportedly able to confirm the buyer’s identity when they asked the Postal Service to purposely mark one of his cash shipments as lost. The buyer then called the post office with a number that was linked to his name and forensic analysis pulled his fingerprints from the packages, reports said.
Blairsville, Pennsylvania: Bookkeeper Sandra Jo Doak has pleaded guilty to mail fraud and filing false income tax returns.
Doak, in her role with a medical office, embezzled some $592,833.30 in unauthorized checks and tried to conceal the embezzlement from her employer. Between 2014 and 2019, Doak also concealed the embezzled money from the IRS on her personal income tax returns, resulting in a tax loss of $123,849.
Sentencing is Dec. 9.
Orem, Utah: Chiropractor and health-care products business owner Louis Hansen has been convicted of attempting to evade the payment of his federal income taxes and corruptly endeavoring to impair the administration of the internal revenue laws.
In March 2012, Hansen presented a check to the IRS for $342,699.41 drawn on a closed bank account in a fraudulent attempt to pay taxes, penalties and interest that he owed for a number of years. Three months later, he presented another 10 additional checks to the IRS drawn on a different closed bank account in a second attempt to fraudulently discharge his tax debt. Each of these 10 checks was in the amount of $425,000; collectively they were sent to at least six IRS offices.
Sentencing is Nov. 4, when Hansen faces a maximum of five years in prison for tax evasion and three years for corruptly impeding IR laws.
Alice, Texas: Tax preparer Tiffany Phenix has been sentenced to 15 months in prison to be followed by a year of supervised release for aiding and assisting in the preparation of a false federal income tax return.
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She was also ordered to pay $284,826 in restitution.
Anchorage, Alaska: Businessman Walter Earl has been sentenced to six months of home confinement and more than $400,000 in fines and restitution for illegally trafficking in walrus ivory and failing to report business income to the IRS.
Earl, owner of The Antique Gallery, regularly trafficked in illegal walrus ivory for many years. On three separate occasions in 2017, he illegally purchased and sold walrus ivory head mounts (the skull and ivory tusks of a walrus) to undercover agents. He tried to conceal his illegal activities by falsifying documents and lying to purchasers about the ivory’s source, stating the ivory was legal to purchase and sell due to its age and claiming that he was legally allowed to purchase the walrus ivory because he employed Alaska Natives. Investigators also found that Earl had illegally purchased more than 50 walrus tusks, which he kept as inventory for future illegal sales.
Separately, investigation revealed that Earl intentionally failed to file individual income tax returns for 2013 through 2017. His gross income included income from his antique business, which totaled $679,245 for the period. Earl kept inadequate business records, primarily used cash and structured transactions at various financial institutions to sidestep banking reporting requirements. He also instructed his employees not to report the income they earned.
He pleaded guilty to three felony wildlife trafficking counts and one count of tax evasion. He was also ordered to pay $185,000 in fines and $216,054 in restitution to the IRS and to forfeit 50 walrus tusks and other illegal marine mammal parts.
Caneadea, New York: Resident Amanda L. Rickard has been sentenced to three years in prison for aiding and assisting in the preparation of a false and fraudulent return.
Between 2011 and 2018, she prepared and filed 23 individual returns that identified dependents that the taxpayer was not entitled to claim. Rickard kept a notebook identifying the names, dates of birth and Social Security numbers of children whose parents had not claimed them as dependents on their own returns. Rickard then used this information to prepare the materially false returns for clients. She also prepared and submitted individual returns on behalf of taxpayers who hadn’t authorized her to do so.
Rickard was also ordered to pay $58,819 in restitution to the IRS and $19,772 restitution to the New York State Department of Taxation and Finance.
Los Angeles: Disbarred personal-injury lawyer and former CPA Philip James Layfield, a.k.a. Philip Samuel Pesin, of Las Vegas and formerly of Coto de Caza, California, has been found guilty of 22 felonies for stealing most of a multimillion-dollar settlement that should have been paid to an accident victim, as well as of cheating on his federal taxes.
Layfield was found guilty of 19 counts of wire fraud, one count of mail fraud, one count of tax evasion, one count of failure to collect and pay over payroll taxes and one misdemeanor charge of failure to file a return.
He owned and operated law firms, including Layfield & Barrett, which, at various times, maintained offices in Irvine, California; Los Angeles; El Segundo, California; Park City, Utah; and Scottsdale, Arizona.
After stealing millions from clients’ settlements and just before getting on a flight to Costa Rica, he borrowed $700,000 from a business lender by providing misleading information and failing to disclose material information. Then he used substantial portions of the loan for personal expenses, including buying a horse and shipping horses to Costa Rica.
In 2016, Layfield entered into an agreement to represent an individual who was struck by an automobile in Orange County and suffered significant injuries. After negotiating a $3.9-million settlement related to the accident, Layfield misappropriated some $2 million owed to the victim for personal and business uses, including to pay clients whose settlement proceeds Layfield had earlier misappropriated. The car accident victim received only $25,000 of the settlement proceeds.
Layfield also failed to file a federal income tax return for 2016, despite receiving more than $3 million, including embezzled client settlement money. He also caused his law firm to not pay some $120,976 in federal payroll taxes for the second quarter of 2017.
The State Bar of California disbarred Layfield in 2018. He was also a CPA but, authorities said, his license expired in July 2019 according to the California Board of Accountancy.
Sentencing is Nov. 8, when he faces a maximum of more than 200 years in prison.
