Tax Fraud Blotter: Good people

Not so amusing; in the rough; interior designs; and other highlights of recent tax cases.

Claxton, Georgia: Tax preparer Samir Patel, 56, of Statesboro, Georgia, has been sentenced to two years in prison after previously pleading guilty to tax evasion. 

Patel was a preparer at a national tax prep business and, in 2015, purchased a franchise of the business. He hired, trained and supervised preparers and continued to prepare returns for clients.

He filed income tax returns that omitted more than $1.28 million in income — including almost $1.18 million from S&W Amusements, a company that placed coin operated amusement machines in convenience stores and gas stations — and evaded proper assessment of his personal taxes for years 2015, 2016 and 2017.

He was also ordered to pay some $550,000 in restitution to the United States and a fine of $95,000 and was ordered to serve three years of supervised release after his prison term. Patel is also prohibited from preparing returns for others or for entities in which he has no interest during his term of supervised release.

South Lake Tahoe, California: Software exec Robert Hienekamp has pleaded guilty to willfully failing to pay federal employment tax withholdings.

In 2016 and 2017, Hienekamp was CEO of Endowance Solutions Inc., a software consulting and development company. During each of those years, Endowance withheld income, Social Security and Medicare taxes from employees’ wages but Hienekamp did not file quarterly employment tax returns or pay the withholdings to the IRS.

He caused a tax loss of more than $800,000.

Sentencing is June 27. Hienekamp faces a maximum of five years in prison as well as a period of supervised release, restitution and monetary penalties.

Springfield, Massachusetts: Kevin M. Kennedy, of East Longmeadow, Massachusetts, former operator of two municipal golf courses, has been convicted of conspiring to defraud the U.S. and of making a false statement. He was acquitted of embezzlement from a local government.

Kennedy owned and operated Kennedy Golf Management Inc., through which he managed the City of Springfield’s two public golf courses. He conspired with two individuals to evade taxes he owed on money received from his company. 

Before trial, Kennedy pleaded guilty to four counts of filing a false individual income tax return for 2011 through 2014, during which he also admitted to filing a false return in 2009 and 2010. For each of those years, he did not report to his preparer all the cash and checks his management company received from his operation of the golf courses.

He also paid — mostly in cash — for the construction of two homes in East Longmeadow and on Cape Cod. To induce the bank to provide a mortgage for part of the East Longmeadow home, he submitted a home purchase contract to the bank that falsely reflected a total purchase price.

Sentencing is March 1. Conspiracy to defraud the U.S. provides for up to five years in prison, three years of supervised release and a fine of $250,000. Making a false statement provides for up to 30 years in prison, five years of supervised release and a fine of $1 million. The tax fraud charges each provide for up to three years in prison, three years of supervised release and a fine of $100,000.

Lexington, Massachusetts: Christina Iannelli, 51, of Sudbury, Massachusetts, a former bookkeeper, has pleaded guilty to seven counts of bank fraud in connection with her embezzling more than $180,000 from her former employer. 

Iannelli was an independent contractor for an interior design firm. Beginning around October 2018, she prepared dozens of fraudulent invoices with inflated totals derived from inaccurate math and then issued herself checks for the inflated amounts from the firm’s checking account. Around the following July, she also began issuing herself dozens of additional unauthorized checks. She concealed the fraudulent payments with false entries in the firm’s accounting records.

In total, Iannelli embezzled more than $30,000 through inflated compensation checks and more than $150,000 through additional unauthorized checks.

Sentencing is March 14. Bank fraud provides for up to 30 years in prison, five years of supervised release and a fine of $1 million. 

Las Vegas: CPA Dustin M. Lewis, of Henderson, Nevada, has been sentenced to 13 months in prison for his role in separate bribery and tax fraud conspiracies.

Lewis, who previously pleaded guilty, was employed by the local accounting firm L.L. Bradford & Company. Beginning in February 2015 through about February 2016, he conspired with and paid a public official with the U.S. Department of Interior’s Bureau of Reclamation more than $150,000 in bribes and kickbacks.

In exchange, the conspirator, who was a member of a selection committee responsible for awarding government contracts to perform auditing services for bureau programs, steered an audit contract to L.L. Bradford.

Lewis and his co-conspirator also conspired to file a false 2013 corporate return and other tax forms on behalf of six business entities that collectively claimed more than $11 million in fraudulent business deductions. The federal tax loss exceeded $1.5 million.             

Lewis was also ordered to serve three years of supervised release and to pay some $704,002 in restitution. The court also imposed a criminal forfeiture money judgment for $704,002.

Tampa, Florida: Ashley Flournoy of Riverview, Florida, has been sentenced to two years in prison for conspiracy to commit tax fraud and aiding or assisting in the preparation of false income tax return documents.

Previously sentenced in connection were co-defendants and tax preparers Jamica Nelms, Capriesha Cummings and Camille Harper, all of St. Petersburg, Florida.

From January 2017 through April 2019, Nelms, Cummings, Flournoy and Harper were preparers at a business in St. Petersburg. They conspired to defraud the U.S. by preparing false income tax returns for numerous clients, generating inflated federal refunds. They documented on Schedules C that clients owned fictitious businesses, maximizing Earned Income Tax Credit claims; they also fraudulently reported that clients were entitled to claim credits for fuel taxes or education expenses.

The defendants collectively were ordered to pay $1,006,881 in restitution to the IRS and to never prepare returns for third parties again.

Elka Park, New York: Cousins Dennis Radcliffe and Kenneth Radcliffe have each been sentenced to six months in jail and ordered to pay a $40,000 fine for conspiring to evade taxes on income earned from stock sales.

The two each previously pleaded guilty to two conspiracies.

In the first, they conspired to avoid taxes on their personal income by failing to report several million dollars of income earned principally from sales of penny stocks from 2014 through 2017. The stock sales occurred in brokerage accounts that the pair controlled and that stood in the names of their companies, Crackerjack Classics and Universal Consulting.

In the second conspiracy, Dennis and Kenneth Radcliffe conspired with each other and with Joseph Radcliffe, the father of Dennis, to avoid taxes on some $500,000 in compensation that Crackerjack and Universal paid to Joseph from 2013 through 2019.

Joseph Radcliffe was a former Wall Street stockbroker and at the time he was evading the payment of taxes he owed more than $1 million to the Securities and Exchange Commission after settling fraud allegations in 2011. Joseph Radcliffe, who was sentenced in 2022, has failed to repay the SEC.

Dennis Radcliffe was also ordered to pay $77,552 in restitution to the IRS; Kenneth Radcliffe was ordered to pay an additional $152,274 in restitution. In imposing sentence, the judge noted that the pair “come from good people” and that there was no excuse for their willful conduct.