Tax Fraud Blotter: Numbers games

Sanctions list; getting out of the Market; why oh Y; and other highlights of recent tax cases.

Washington, D.C.: The IRS Office of Professional Responsibility has published recent tax professionals’ sanctions, including censure, suspension or disbarment from practice before the IRS (by certification, alphabetical by state and all dates this year):

• CPAs: Robert L. Parsons, Highlands Ranch, Colorado, effective indefinitely from July 25; Walter V. Murray, Covington, Georgia, indefinite from July 25; John A. Brauckmann, Louisville, Kentucky, indefinite from July 25; Ronak R. Shah, St. Paul, Minnesota, indefinite from Sept. 28; John J. Savignano, White Plains, New York, indefinite from July 6; and Anthony M. Sharper Sr., Charlotte, North Carolina and South Carolina, indefinite from July 25; and Pamela L. Corn, Georgetown, Texas, indefinite from July 25.
• Attorney/CPAs: Otis J. Stewart Jr., Birmingham, Alabama, indefinite from May 21; and Milton Ben Heckathorn (a.k.a. Ben Heckathorn), Red Oak, Texas, indefinite from Sept. 28.
• Enrolled: James L. Canfield, Wisconsin Rapids, Wisconsin, indefinite from July 25.
• Attorneys: Edward G. Dardis, Carabaset Valley, Maine, indefinite from July 11; John D. Seawright, Jackson, Mississippi, indefinite from Sept. 28; Anthony P. Vigna, Thornwood, New York, indefinite from July 25; and Jonathan B. Garner, Hamlet, North Carolina, indefinite from Sept. 28.

Reinstated to practice before the IRS were James J. Pak, attorney/CPA, Buena Park, California, effective Sept. 28; and Edgar H. Gee Jr., Knoxville, Tennessee, effective July 25.

Jackson, Mississippi: Tax preparers Adam Earnest, Christopher Randell and James Klish have been convicted of conspiracy to defraud the United States. Earnest and Randell were separately convicted of individual counts of preparing false returns.

The three worked at the tax prep business Sunbelt Tax Services, where they conspired with others to fraudulently claim inflated refunds for clients by reporting false education credits, itemized deductions and business profits or losses.

Earnest and Klish also created at least four returns claiming false items for some of their clients.

Sentencing is Feb. 22. Each faces a maximum of five years in prison for conspiracy to defraud the United States; Earnest and Randell face a maximum of three years in prison for each false return count on which they were found guilty. They also each face a period of supervised release, restitution and monetary penalties. 

Chicago: Former resident Lamar “Cory” Thompson has been sentenced to 30 months in prison for mail fraud arising out of a scheme to fraudulently obtain refunds from the IRS.

From around June 2010 through January 2014, he obtained the Social Security numbers of individuals in the Chicago area and persuaded them to get fingerprinted under the false pretense that they would be working for him as tax preparers. Thompson used this personal information without the knowledge of these individuals to unlawfully obtain EFINs, PTINs and EINs for filing fraudulent returns. Thompson also caused bank accounts to be opened in the names of others and used these accounts to deposit and withdraw the fraudulent tax refunds.

In total, Thompson attempted to obtain some $1,549,342 in fraudulent federal refunds.

He was also ordered to serve three years of supervised release and pay $908,727 in restitution to the United States.

Houston: A federal court has permanently enjoined an area tax preparer and her business from preparing federal tax returns for others, among other related prohibitions.

Crystal Ojeda and her tax prep business, Money Market Tax Company LLC, consented to the injunction. The complaint filed earlier this year alleges that Ojeda prepared more than 10,000 federal income tax returns during 2018 to 2023 from Money Market Tax Company as well as through two separate sole proprietorships, Money Market Financial Services and Money Market Financial.

The complaint further alleges that in a substantial number of these returns, Ojeda significantly overstated clients’ refund amounts by fabricating or inflating business losses, medical and dental expenses and charitable contributions. The complaint also alleges that for some returns Ojeda falsely claimed undeserved residential energy credits.

Ojeda allegedly cost the U.S. some $4.8 million in tax revenue just from 2020 to 2022 and millions more from earlier years.

The injunction also prohibits Ojeda and her business from acting as a federal tax preparer for any person or entity other than on their own behalf and from using or obtaining any PTIN or EFIN.

Enid, Oklahoma: Community leader Deborah Wilczek has pleaded guilty to making, uttering and possessing a forged security and to filing a false federal income tax return.

Wilczek was charged with devising and carrying out a scheme to defraud a local YWCA and the Cimarron Montessori Children’s House. Beginning in November 2012 and continuing through April 2019, Wilczek served in leadership positions for the YWCA; she also served on Cimarron’s school board in various capacities from August 2016 to April 2021. She routinely accessed business bank accounts of both entities and made several unauthorized transfers from those accounts to pay for her personal expenses.

The superseding indictment alleges that Wilczek obtained and attempted to obtain some $414,951.35 from the two nonprofits, $139,308.35 from the YWCA and $275,643 from Cimarron.

The superseding indictment further alleges that Wilczek willfully filed false federal income tax returns for 2016 through 2020, on which she listed her total income substantially below her actual income because of the fraud.

Wilczek faces up to 13 years in prison and fines of up to $500,000. She has agreed to pay restitution to victims.

New Orleans: Tax preparer Christopher Coburn has pleaded guilty to making false statements on an individual tax return.

Coburn under-reported his tax prep business income on his individual tax returns by some $104,156.06 for tax years 2016 through 2018, causing a federal tax loss of some $29,781.

He faces up to three years of imprisonment, up to a year of supervised release, a fine of up to $100,000 and a mandatory special assessment fee of $100. Coburn agreed to pay $29,781 in restitution to the IRS and to be permanently enjoined from preparing federal returns for others. Sentencing is March 12.

Lansing, Illinois: Tax preparer Vervia Watts has pleaded guilty to aiding and assisting in preparing false income tax returns.

She operated a tax prep business in Illinois and elsewhere. From January 2017 through June 2023 she prepared and filed individual income tax returns for clients that intentionally reported false education expenses and business income to inflate federal refunds.

Watts received at least $300 for each return she prepared, which in total claimed more than $1.5 million in fraudulent refunds.

She is scheduled to be sentenced on Feb. 14. She faces a maximum of three years in prison, as well as a period of supervised release, restitution and monetary penalties.