Ooo, the pain; off the market; a lower calling; and other highlights of recent tax cases.
Washington: Bobby Tucker, 63, of Suffolk, Virginia, former chief of collections for the District of Columbia Office of Tax and Revenue, has been sentenced to 14 months in prison for his conviction for a bribery charge.
The charge stemmed from a scheme in which Tucker bribed an OTR official to reduce tax liabilities of a business he consulted with, and for other actions to benefit Tucker’s business interests.
Tucker agreed to pay an OTR official, who was working as a confidential source, to obtain referrals of city taxpayers with outstanding tax liabilities. With one such referral, Tucker paid $5,000 in bribes to the OTR official in exchange for that official wiping out nearly $150,000 in tax liability for a business organization operating in the District of Columbia.
Tucker, who pleaded guilty in June, was also sentenced to two years of supervised release, a $10,000 fine and a special assessment of $100.
Pinellas Park, Florida: Businessman Tom Wynne has been sentenced to 33 months in prison to be followed by three years of supervised release for one count of conspiracy to commit tax evasion, one count of tax evasion and seven counts of money laundering.
Wynne, who pleaded guilty in February, owned and operated Pain and Wellness Clinic, where he hired medical doctors to prescribe for patients large quantities of Schedule II controlled substances, such as oxycodone and hydromorphone, outside the usual course of professional practice. Wynne used the illegal proceeds generated from his clinic to purchase real property in the Tampa Bay area.
For each tax year beginning in 2014 through 2017, Wynne underreported Pain and Wellness Clinic’s gross receipts. He also conspired and agreed with clinic physicians to defraud the IRS by creating and preparing, among other false and fraudulent tax-related documents, phony 1099s to pay the clinic’s two doctors.
He was also ordered to repay the IRS $359,209, pay a fine of $150,000 and forfeit two properties.
Bryn Mawr, Pennsylvania: Marketer Jordan Richter has pleaded guilty to filing false tax returns.
Richter sold marketing services and products, including email lists, to stock promoters and from 2012 to 2014 did business through Diamond Spot Media, a partnership in which he was a 99.5-percent owner. He inflated business expenses on Diamond Spot’s returns, which also resulted in him underreporting income on his personal returns for 2012 through 2014.
Richter caused a total tax loss to the IRS of more than $100,000.
Sentencing is March 8, when Richter faces a maximum of three years in prison for each count. Richter also faces a period of supervised release, restitution and monetary penalties.
Miami: Tire importer Marco Parra has pleaded guilty to conspiracy to defraud the government.
Parra operated Road Tire Plus Corp., and from 2013 through 2016 conspired with others in the tire industry to evade paying federal excise taxes on truck tires marked for highway use.
Tire importers are responsible for excise taxes when their truck tires are sold to tire retailers, who then resell the tires domestically. Tire importers typically pass on the cost of the excise tax to tire retailers and collect the excise taxes from them. But if the tires are later exported rather than sold domestically, the law provides for a credit for the excise taxes paid.
For some retailers, Parra sold truck tires subject to excise taxes; he collected the excise taxes due but did not remit those taxes to the IRS and did not file tax returns reporting the tire sales required. For others, Parra never collected the federal excise taxes due on the sales but instead obtained false bills of lading claiming that the tires were exported, so he could obtain an excise tax credit even though he knew the tires were not exported.
Parra’s failure to timely file excise returns for 2014 through 2016 caused an excise tax loss of some $887,112. He has since paid more than $700,000 to the IRS.
Sentencing is Feb. 18. Parra faces a maximum of five years in prison, as well as a period of supervised release, restitution and monetary penalties.
Steubenville, Ohio: David A. Franklin, former comptroller of the Catholic Diocese of Steubenville, has been sentenced for failing to pay payroll taxes withheld from the paychecks of diocesan employees, filing false returns and embezzling $299,500 in diocesan funds between 2008 and 2017.
From 2004 through 2016, he caused payroll taxes to be withheld from employee paychecks for the Diocese of Steubenville and the Office of Social Ministry (a social services and charitable nonprofit in the diocese) but did not pay the withheld funds over to the IRS. From 2013 through 2016, Franklin did the same thing at the Mount Calvary Cemetery Association.
The three diocesan entities later paid the IRS more than $2.7 million in withheld payroll taxes and the employer portion of the employment taxes that Franklin had caused not to be paid over. The entities also had to pay nearly $1 million in interest and penalties to the IRS.
While he was failing to truthfully account for and pay over payroll taxes, Franklin also embezzled $299,500 from the diocesan entities by preparing fraudulent checks to be issued to himself. For four tax years, he also filed false personal income tax returns, causing tax losses of more than $33,000.
Franklin pleaded guilty in July to one count of willful failure to account for and pay over employment tax, one count of making a false income tax return and one count of wire fraud. He has been sentenced to a year and a day in prison and two years of supervised release and been ordered to pay $1,332,885.04 in restitution.
Restitution will go to the Diocese of Steubenville, the Office of Social Ministry, the Mount Calvary Cemetery Association and the IRS. Franklin was also ordered to forfeit the money he embezzled.
Philadelphia: Arleny Reyes Nunez, of Philadelphia and the Dominican Republic, has been sentenced to 30 months in prison and three years of supervised release for using others’ personal ID information to file fraudulent returns.
From 2010 through May 2014, she prepared and filed approximately 29 false tax returns, retrieved the refund checks — sometimes paying a child to retrieve paper checks from mailboxes at vacant Philadelphia properties — and deposited the checks into bank accounts associated with fake businesses that Nunez created.
Later Nunez fled to her home country of the Dominican Republic, where she was ultimately arrested by local authorities for using a false passport; she was extradited back to the U.S. in January 2020.
Nunez, who pleaded guilty in August, was also ordered to pay $154,528 in restitution.
Fresno, California: Marcela Heredia, 47, of Riverside, California, a former employee of the IRS, has been sentenced to six years in prison for a scheme to receive refunds by filing false returns using the stolen identities of at-risk youth.
Until 2014, Heredia worked at the Fresno Economic Opportunities Commission’s Transitional Living Center and at the IRS as a tax examiner between 2008 and 2014. While working at the Living Center, Heredia stole residents’ personal ID information and filed numerous returns that included false wage and withholding information, false educational expenses, false dependent claims and other false claims. She directed the refunds to her personal bank account, spending the money on various personal expenses and failing to report any of the refund money on her own 2011 return.
Hattiesburg, Mississippi: Businessman Charles Chandler Smith, 43, has pleaded guilty to filing a false return.
In 2014, Smith transferred $1,305,090 from an account held by his business, Lil Mad, to another company and falsely claimed it as a business expense on his return; Smith falsely claimed that his income with Lil Mad was only $143,070.
Sentencing is March 24. He faces a maximum of three years in prison and a $100,000 fine.
