Casa crook; getting Mellow; 3,600-to-one; and other highlights of recent tax cases.
Annapolis, Maryland: The Maryland Comptroller has suspended processing of electronic returns from 13 tax preparers due to a high volume of questionable returns.
The preparers are, in Maryland: Carolyn Boice, Baltimore; Yadof Financial LLC, DF Bockarie, and Romaft Tax, a.k.a. Timothy Funso, both of Lanham; BAI S. Mansary, Landover Hills; PCSCS Tax Services, Celestin A. Fanga, Oxon Hill; Eaglet 200, Brafi Adomako Jr., Silver Spring; and Jazpro Solutions LLC, Jazmin Schiano Di Cola, Frederick.
And from outside Maryland: K Coleman Legal Document Preparation, Katrina J. Coleman, Claymont, Delaware; Godlove Jelaa, Manassas, Virginia; Patriot Tax Services LLC, Maxwell Taylor, Annandale, Virginia; Best Group Tax Services, Tucker, Georgia; Merseigne Pro Business Consulting, Maurice Ntock DBA, Miami; and DDK Global Solutions Inc., Danny K. Dorman, Alpharetta, Georgia.
Las Vegas: Tax preparer Brenda Eleana Reyna, 38, has been sentenced to 15 months in prison to be followed by a year of supervised release after pleading guilty in September to one count of aiding and assisting in the preparation and filing of a false return and one count of making and subscribing a false return.
Reyna, operator of USA Tu Casa Tax Services, fraudulently claimed deductions and misrepresented to clients the contents of returns that she filed for them. For tax years 2015 through 2019, Reyna caused at least $2.75 million in federal tax loss.
When preparing her own returns, she also fraudulently filed returns that did not accurately report her income. For tax years 2015 through 2020, Reyna failed to report some $606,663 in net income, causing at least $169,866 in federal tax loss.
Jennings, Missouri: Tax preparer Darius D. Cobb, 51, has admitted preparing at least 23 fraudulent returns that created losses of more than $500,000.
Cobb, who pleaded guilty to two counts of aiding in the preparation of a false and fraudulent return, admitted preparing at least 200 returns for tax years 2017 and 2018. On at least 23 of the returns, he included such information as W-2s with false wages and withholdings, false Schedules C, false claims for the American Opportunity Credit and false information about dependents. On one return, Cobb included a business loss of $14,024 even though the taxpayer didn’t own a business.
Losses totaled some $517,021.
Sentencing is July 11. Cobb faces a maximum for each charge of three years in prison, a $250,000 fine or both. He has agreed to pay restitution to the IRS.
Savannah, Georgia: Melissa Metts Johnson, former owner of a pizza franchise, has been sentenced to 18 months in prison and ordered to pay restitution for failing to remit more than $400,000 in payroll taxes.
She was sole owner of LHMS Inc., which operated a franchise of the Mellow Mushroom pizza restaurant and acknowledged that her company withheld payments for federal income taxes, Medicare and Social Security from employees’ paychecks from 2015 through 2019 but failed to pay all those taxes to the IRS.
Johnson, who pleaded guilty, was also ordered to pay $428,203.48 in restitution and serve a year of supervised release after her prison term.
Orlando, Florida: Erotida Natasha Harden Ortiz has been sentenced to eight years in prison and Aida Cortes to four years and six months after being found guilty last October in connection with tax fraud.
Harden was convicted of conspiracy to defraud the U.S. and six counts of aiding in fraudulent and false statements related to IRS returns. Cortes was convicted of one count of conspiracy to defraud the U.S.
Ortiz owned a tax prep firm called Certified; Cortes was her office manager. Before opening that firm, they both worked for two other tax businesses that had been closed by the IRS.
From 2016 through 2018, they schemed to file taxes for unsuspecting taxpayers by filling out fraudulent Schedules C that showed a business loss and enabled the taxpayers to obtain the Earned Income Tax Credit and undeserved refunds. The taxpayers continued to come back to Certified every year; the prep firm did not provide the returns to the taxpayers to review or review the tax returns with the taxpayers before filing.
Certified filed more than 3,600 federal returns, with only one resulting in a taxpayer owing money to the IRS. Certified charged some $400 per return, resulting in more than $1.2 million in prep fees. In addition, in the last year of operation, Harden claimed income from Certified of some $394,000 but, due to a fraudulent Schedule C that claimed expenses of $379,000 on her return, she was able to qualify for the EITC and receive a $6,375 refund.
Harden and Cortes were also ordered to pay the IRS $3.796 million in restitution.
Houston: Attorney Jack Stephen Pursley, a.k.a. Steve Pursley, has, following a conviction reversed on appeal, pleaded guilty in connection with an offshore tax evasion scheme and been sentenced to two years in prison.
Pursley conspired with a former client to repatriate more than $18 million in untaxed income that the client had earned through his company, Southeastern Shipping. Knowing that his client had never paid taxes on these funds, Pursley designed and implemented a scheme where the untaxed funds were transferred from Southeastern’s bank account in the Isle of Man to the U.S. Pursley helped conceal the movement of money from the IRS by disguising the transfers as stock purchases in U.S. corporations owned and controlled by Pursley and his client. At trial, the government proved that Pursley received more than $4.8 million and a 25% ownership interest in the co-conspirator’s ongoing business for his role in the scheme.
For tax years 2009 and 2010, Pursley evaded assessment of and failed to pay the income taxes he owed on these payments by, among other means, withdrawing the funds as purported non-taxable loans and returns of capital. Evidence showed that Pursley used the money he garnered from the scheme for personal investments and to purchase assets for himself, including a vacation home in Colorado and property in Houston.
The tax loss exceeded $6.4 million.
Washington, D.C.: Tax preparer Awett Tedla of Indianapolis has pleaded guilty to conspiring to file false returns and related charges.
Tedla owned and operated the tax prep firm Speedy Tax Services in Washington and District Heights, Maryland. From 2012 through 2016, she and her conspirators prepared and e-filed fraudulent federal returns for clients and stolen IDs of unwitting taxpayers, claiming refunds were due. The returns reported fictitious businesses and claimed certain credits to inflate refunds. Clients paid an increased fee depending on the size of the refund.
Tedla also underreported business gross receipts and taxable income on her 2016 personal income tax return and in total evaded some $171,534 in income tax between 2013 through 2016.
She faces up to 20 years in prison for wire fraud, 10 years for conspiring to file false claims, five years for tax evasion and two years for aggravated ID theft, as well as a period of supervised release, restitution and monetary penalties.
Claxton, Georgia: Tax preparer Samir Patel, a former owner of national tax preparation franchise, has pleaded guilty to evading federal income taxes.
From 1999 to 2021, Patel was a tax preparer at a national prep business; in 2015, he purchased a franchise of the business. He hired, trained and supervised preparers and continued to prepare returns for customers.
Patel, however, willfully filed false income tax returns that underreported his income and evaded his personal taxes for 2015 to 2017.
He faces a maximum of five years in prison, as well as a period of supervised release, restitution and monetary penalties.
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