Completely fabricated; comp con; ain't that a kickback; and other highlights of recent tax cases.
Rocky Mount, North Carolina: Tax preparers Betty Hawkins, 51, and Phyllis Ricks, 63, have been sentenced to prison for preparing false federal returns for clients.
From about 2009 through 2018, they conspired with others to file false returns for clients of the tax prep businesses where they worked. These returns included fictitious federal income tax withholdings as well as other fraudulent items that generated fake refunds.
Hawkins, Ricks and their conspirators caused more than 1,000 false federal returns to be filed that claimed a total of some $5 million in fraudulent refunds.
Ricks was sentenced to three years in prison and Hawkins to two years. Both were ordered to serve three years of supervised release and to pay some $5.2 million in restitution to the U.S. They both previously
Waco, Texas: Tax preparer Labanda Loyd has pleaded guilty to engaging in a multi-year conspiracy to prepare and file false returns on behalf of clients and to obtaining a fraudulent loan under the Paycheck Protection Program.
Between 2012 and 2017, Loyd managed two tax prep businesses and worked as a return preparer. She conspired with others at both businesses to prepare and file returns that fraudulently claimed undeserved refunds. As a manager, Loyd instructed some of her conspirators how to prepare false returns, including using what authorities called "completely fabricated" wage and tax withholdings and altering wages and withholdings legitimately reported to the IRS.
Loyd's conspirators included Lashamekwa Alexander, Deidra Brandon, Melissa Johnson, Shaterian Parr, Jaleesia Sais and Tevin Thompson, all of whom have pleaded guilty to the tax conspiracy or other crimes. In all, they caused a tax loss exceeding $1.8 million.
Loyd also pleaded guilty to wire fraud stemming from her false application in 2021 for a PPP loan. On the application, she falsified the gross income of her business and included false documents to corroborate the fabricated income. She received some $18,000 in PPP money.
She faces a maximum of five years in prison for the conspiracy charge and 20 years for wire fraud. She and her conspirators will be sentenced on March 15.
Jacksonville, Florida: Oscar Molina-Avila has been sentenced to four years and four months in prison for conspiracy to commit wire fraud and conspiracy to defraud the U.S.
Between 2016 and 2020, he conspired to pay construction workers off the books to avoid premiums for workers' compensation insurance and payroll taxes. Construction contractors and subcontractors entered arrangements with Molina-Avila and his conspirators through which shell companies facilitated both the distribution of proof of insurance and payment of workers with cash.
In exchange for 6% to 8% of the contractors' and subcontractors' payroll, Molina-Avila and others caused the distribution of certificates of liability insurance in the names of the shell companies, which contractors and subcontractors then used as nominal proof that they were insured. The companies' insurance policies were issued based on fraudulent applications that never disclosed that contractors and subcontractors would be employing workers who were ostensibly insured under the companies' barebones insurance policies. Insurers were defrauded out of more than $10 million.
Molina-Avila and others facilitated the deposit of checks into the companies' bank accounts, as well as the withdrawal of cash to be paid to the employees of the contractors and subcontractors, all without withholding or paying over federal payroll taxes. Through these arrangements with Molina-Avila, the construction contractors and subcontractors could disclaim responsibility for withholding and paying payroll taxes to the IRS or ensuring that the workers were legally authorized to work in the U.S.
The scheme cost the U.S. Treasury more than $12 million.
Molina-Avila, who previously pleaded guilty, was ordered to pay more than $5.4 million in restitution, including $2,111,151 to a workers' comp insurance company and $3,330,596.42 to the IRS. The court also entered an order of forfeiture in the amount of $2,111,151, the proceeds of the wire fraud.
Albuquerque, New Mexico: Robert Fiser, 62, has been sentenced to a year and three months in prison after pleading guilty last summer to one count each of conspiracy and aiding and assisting in preparation of a false and fraudulent return.
At the time of the offenses, Fiser was a registered attorney specializing in tax law and the preparation of federal income tax returns. From October 2009 to November 2013, Fiser assisted one of his clients, Victor Kearney, in preparing income tax returns for tax years 2007 through 2011. Fiser signed each of these returns, knowing that they did not include taxable income that Kearney received in those years from a testamentary trust.
In November 2013, Fiser signed amended returns for Kearney for 2009, 2010 and 2011 and a return for Kearney for 2012, falsely stating on each of them that he had signed in June 2013. Fiser admitted that in October 2014, he sent an email to Kearney advising him not to contact the IRS about the failure to file returns.
In September 2016, Fiser had a conversation with Kearney about not filing income tax returns. Fiser later lied under oath that the reason that he and Kearney did not report income from the trust was that they intended to later file amended returns, though Fiser knew he and Kearney had no intention to do so.
Fiser will also be subject to three years of supervised release. Kearney awaits trial.
Cartersville, Georgia: Businessman Mohammed Ajmal, 49, has been sentenced to two years in prison to be followed by a year of supervised release and ordered to pay $734,232.05 in restitution for making and subscribing a false return.
Ajmal failed to report income from over $2 million in kickbacks from the use of coin-operated amusement machines in his service stations and convenience stores; such machines are regulated by the Georgia Lottery Corporation, which between 2013 and 2015 issued regulations that resulted in Ajmal receiving less revenue from the machines.
In response, Ajmal contacted the company holding the license for the machines and conveyed that the company must pay him additional money if the company wished to continue operating on Ajmal's properties. To disguise the kickbacks, Ajmal told the company to write checks to his relatives. He then used the money for his own benefit, including to build a new home.
From 2015 through 2018, the kickbacks totaled $2,292,847. Ajmal reported none of this income on his returns for 2015 through 2017.
Orem, Utah: Tax preparer Sergio Sosa has been sentenced to 37 months in prison for tax evasion, conspiring to defraud the United States and obstructing IRS efforts to collect his tax debt, which exceeded $1.1 million.
Sosa owned and operated the tax prep business Sergio Central Latino and from about 2004 to 2020 concealed his assets and income from the IRS. From 2003 through 2017, he also did not timely file his own returns or pay the taxes he owed for these years.
After the IRS audited Sosa and began efforts to collect his tax debt — which at the time amounted to more than $750,000 — he used nominees to open business bank accounts, renamed his business and placed it in his children's names and made false statements to the IRS. He also directed one of his children to make mortgage payments on his personal residence using money he provided.
Sosa, who previously
Las Vegas: Former airline exec William Acor has been sentenced to two years in prison after pleading guilty to failing to pay over $2.6 million in employment taxes to the IRS.
Acor was president and CEO of Vision Airlines and responsible for collecting, accounting for and paying over federal taxes withheld from employee wages and for paying the employer matching share of Social Security taxes. From 2014 to 2016, he failed to pay over on behalf of Vision a total of $2,657,254.75. The government further alleged that Acor thwarted IRS collection efforts by transferring assets and income to a third party.
Acor has also agreed to pay $1,667,290.46 in restitution to the IRS.
