That’s entertainment; false, fictitious and fraudulent; dismantled conspiracy; and other highlights of recent tax cases.
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Miami: A Florida man pleaded guilty to evading taxes on millions in income that he earned from business ventures that sold internet access to American servicemembers and contractors stationed abroad.
Between 2013 and 2018, Joseph Stewart, of Miami, earned more than $4.5 million in dividends from his 50% ownership in a business that sold internet access to American servicemembers and contractors stationed at Kandahar Airfield, Afghanistan. Between 2013 and 2018, Stewart also earned income from his 50% ownership of a separate business that sold internet access to soldiers stationed on Guantanamo Bay, Cuba. Despite earning this income, Stewart stopped filing timely tax returns with the IRS once he began receiving significant dividends from his business in 2013.
In April 2016, despite having not filed tax returns or paid taxes since 2013, Stewart filed a false affidavit with the U.S. Citizenship and Immigration Service attaching unfiled copies of federal tax returns while falsely attesting they were filed.
After Stewart received letters from the IRS in 2019, he hired a tax attorney and return preparers and falsely informed them that over $3.8 million in dividends he received between 2013 and 2018 were nontaxable loans. Stewart also falsely stated that he did not know the other shareholders of the business. As a result of these false statements, the tax professionals drafted tax returns for Stewart for 2013 through 2020 that underreported his income and taxes due. Stewart filed these false returns with the IRS, except for a 2013 tax return, which reported that Stewart owed approximately $155,720 in taxes.
In total, Stewart willfully failed to report around $4.62 million in income and caused a total tax loss to the United States of approximately $1.57 million.
Stewart pleaded guilty to one count of tax evasion. He is scheduled to be sentenced at a later date and faces a maximum penalty of five years in prison. He also faces a period of supervised release, restitution and monetary penalties.
Grand Rapids, Michigan: Erin Patti-Coveyou, 36, of Moran, Michigan, pleaded guilty to one count of making a false statement on a federal income tax return. She faces a maximum of three years in federal prison and will pay full restitution to the IRS, calculated at $535,605, and will be sentenced later this year.
From 2021 through 2024, Patti-Coveyou failed to report $1,666,499.78 of income to the IRS when she filed a false tax return on Form 1040 in each of those years. In 2022, she falsely reported her 2021 income was $353,055. In fact, she had obtained an additional $279,079.12 of income from embezzling cash from her employer and her gambling activity. Additionally, for calendar years 2022 and 2024, she underreported her income as $39,960, $53,188 and $56,545, when in fact her true income in those years was $424,882; $461,300; and $650,931, respectively.
Her failure to report income resulted in a total federal income tax loss of $535,605. Patti-Coveyou also agreed to repay a total of $1,751,059 that she embezzled from her employer between 2021 and 2025.
Kansas City, Missouri: Bianca Cobbins, 43, pleaded guilty to making false statements to a financial institution and aiding in the preparation of false tax returns in 2025.
Cobbins was sentenced to 45 months in federal prison and a subsequent four years of supervised release. She was also ordered to repay the victims of these schemes in full.
In December 2019, Cobbins worked with Quanisha Capelton to obtain a fraudulent driver’s license using Capelton’s photo and another individual’s personal information.
Cobbins and Capelton used the license to apply for a checking account at a financial institution. She then added false paystubs to the checking account, which were used with the false license to apply for loans at various financial institutions and consumer loan companies.
The intended loss of the fraudulent scheme was $36,128.32. Her partner, Capelton, was previously convicted and sentenced to prison for use of the other individual’s personal information.
Between 2018 and 2023, Cobbins prepared at least 60 false federal tax returns in a separate scheme. She owned a tax preparation business in Kansas City and often attached fraudulent forms to her clients’ tax returns that claimed false business profits or losses, which inflated their refunds.
The fraudulent tax returns resulted in a loss of $312,656.
Tifton, Georgia: Two southwest Georgia men have pleaded guilty to federal charges after admitting they attempted to steal more than $500,000 through fraudulent New York film and television production tax credits in 2023.
Ryan Rugg, 28, and Joshua Jordan, 37, both of Tifton, used online tax software to file 22 fraudulent New York state returns on behalf of 18 Georgia residents, prosecutors said.
The returns claimed film and TV production credits for individuals who never worked in New York or in the entertainment industry.
Investigators said Jordan also used a stolen identity to obtain a nearly $50,000 refund and called tax officials while impersonating that person.
Rugg pleaded guilty to conspiracy to commit wire fraud and faces up to 30 years in federal prison. Jordan pleaded guilty to wire fraud and aggravated identity theft. He faces up to 30 years, plus a mandatory additional two years on the identity theft charge.
Jordan’s sentencing is scheduled for Sept. 3. Rugg’s sentencing is scheduled for Oct. 29.
San Juan, Puerto Rico: Harry E. Mueriel-Falero, a Puerto Rico Department of Treasury employee, pleaded guilty to his intentional participation in a wire fraud conspiracy involving the loss of approximately $665,693 in Puerto Rico tax revenue. Business owner Gabrielle López-Berríos, pleaded guilty to participating in the same wire fraud conspiracy and a conspiracy to bribe a separate PRDT employee.
Mueriel-Falero knowingly and willfully conspired to commit wire fraud to defraud the PRDT by creating and submitting false information in the tax returns of several individuals and entities to eliminate or reduce tax debts or illegally claim tax refunds. From June 2023 through December 2024, Mueriel-Falero was an employee and agent of the PRDT with duties that included physically and electronically accessing and reviewing tax returns and documents related to invoicing and collection of owed taxes. The defendant had privileged access to the PRDT’s online platform, the Internal Revenue Unified System, and was experienced and able to access, monitor and modify taxpayer information, including creating taxpayer credits, modifying income tax, employee retention tax and sales tax information.
As part of the conspiracy, Mueriel-Falero solicited and accepted cash payments and other benefits, in exchange for submitting false information to the PRDT. The false information was submitted to the PRDT for the elimination of taxes owed, evasion of taxes and theft of funds, with a total approximate loss to the PRDT of $665,693. One of the individuals Mueriel-Falero conspired with was López-Berríos.
In April 2024, López-Berríos paid Mueriel-Falero money in cash through Person A to create and submit false information in López-Berríos’ personal tax returns to eliminate and reduce tax debts with the PRDT resulting in an approximate loss to the PRDT exceeding $11,192.
The sentencing hearing for Mueriel-Falero and López-Berríos are scheduled for October 9 and October 16 respectively.
Bellevue, Washington: Thanjavur Manavalan, 65, a tax preparer, was sentenced to 18 months in prison for three counts of aiding and assisting in the preparation and presentation of false tax returns.
Manavalan falsified charitable contributions, proceeds and initial prices of investments sold, business losses, rental income and private loans, and more on his clients’ tax returns.
Manavalan’s tax preparation business attracted clients in the tech industry, many of whom were originally from India. These victims testified that they trusted Manavalan to compute and file their taxes correctly.
Manavalan’s tax preparation business filed thousands of returns and grew over the course of the fraud scheme. While he saved his clients money on their taxes, he also developed a reputation that helped build his business, aiding his firm’s year-over-year growth spike from about fifty additional tax returns to almost 300.
More than a dozen tax returns for tax years 2018-2020 were alleged to contain false and fraudulent information and that the total tax loss to the U.S. Treasury exceeded $250,000.
In addition to restitution of $115,672, Manavalan was ordered to pay a $100,000 fine. He was also ordered to be on one year of supervised release following his prison term.
Manavalan has owned and operated Mano Accounting Services since 2004 and he indicated he is closing his business.
St. Paul, Minnesota: Henry Remington Herod, 43, was sentenced to 30 months in prison and ordered to pay $1.18 million in restitution for his role in preparing and filing false, fictitious and fraudulent federal income tax returns claiming refunds. Herod was sentenced on July 16.
Beginning in or about April 2022 and continuing through at least May 2023, Herod conspired with Matthew McDowell and others to defraud the IRS by obtaining and aiding in obtaining the payment of false, fictitious and fraudulent claims. McDowell was separately sentenced on April 6.
As part of the conspiracy, Herod devised and participated in a scheme to obtain money from the United States government by filing false federal income tax returns claiming refunds. He solicited others to provide their names, addresses and Social Security numbers, and used false employment, income and tax credit information to defraud the U.S. through fraudulent tax filings.
For tax year 2021, Herod knowingly and willfully completed and filed false tax returns claiming refundable sick and family leave tax credits available to certain self‑employed individuals due to COVID-19-related care. Herod charged filing co‑conspirators a portion of their fraudulent refunds as a fee. He also personally prepared and filed false claims for refunds on behalf of individuals for tax year 2022. These claims included false refundable fuel tax credits.
Together, Herod and McDowell completed and filed 115 fraudulent federal income tax returns, falsely claiming the filers were entitled to approximately $3,032,839 in refunds.
Pensacola, Florida: D’ontrinique K. Johnson, formerly known as D’ontrinique K. Wilkerson, 30, and Tequilla D. Nairn, formerly known as Tequilla D. Robinson, 37, both of Pensacola, each pleaded guilty to one count of conspiracy to aid or assist in preparation of false tax returns and to stealing government money and filing false tax returns and three counts of filing a false tax return. Nairn additionally pleaded guilty to one count of aggravated identity theft and one count of wire fraud.
Johnson worked as a tax preparer for Nairn, who owned and operated First Premium Solutions, a tax return preparation business in Escambia County. Between 2021 and 2023, Nairn and Johnson conspired to routinely prepare fraudulent federal income tax returns for their clients as well as fraudulent personal returns, collectively preventing the payment of more than $192,000 in federal taxes owed to the IRS. Nairn and Johnson knew the returns they prepared contained materially false items, such as fraudulent credits or business information, which were never provided to them by their clients.
Johnson’s sentencing is scheduled for July 28 and Nairn’s sentencing is scheduled for October 8. If convicted, Johnson and Nairn face up to five years in prison for the conspiracy count and up to three years for each filing a false tax return count. Nairn additionally faces a mandatory consecutive two years in prison for the aggravated identity theft count and up to 20 years for the wire fraud count.
Seattle: A 70-year-old Seattle real estate owner was sentenced to 20 months in prison for six counts of tax evasion and six counts of filing false tax returns. Steven T. Loo failed to report income of more than $4.7 million. At the sentencing hearing the judge imposed a $250,000 fine and three years of supervised release to follow the prison term.
Loo had an ownership interest in and operated multiple commercial real estate properties in western Washington and California. He hired property management companies to manage the properties, and had them send profits from the properties to two bank accounts in the name of shell companies he controlled. Loo spent this money for his benefit and that of his family and friends, and also re-invested funds in various businesses he controlled. However, he did not declare that income — over $4.7 million on his tax returns. Loo used shell companies and repeated transfers of funds to conceal the income from the IRS.
The income from the eight properties operated via LLCs was funneled into bank accounts associated with two specific inactive entities that were established in Washington in 1999. Loo did not report this income to the IRS, and failed to inform his tax return preparer of these funds that were income from his properties.
When his tax returns over a 20-year period are viewed in totality, Loo claimed he owed no tax at all and claimed a net refund from the IRS. Prosecutors asked for a 51-month sentence, saying Loo’s motivation was simple: greed. In addition to the prison sentence and $250,000 fine, Loo was ordered to pay prosecution expenses of about $5,300.
Loo has already paid back taxes to the IRS of $1,603,686.
Sharon Hill, Pennsylvania: Federal authorities have dismantled a bank fraud conspiracy that exploited stolen mail and altered checks to siphon funds from financial institutions.
Former postal worker Juawan Reed of Sharon Hill, Pennsylvania, pleaded guilty to conspiring to commit bank fraud, aggravated identity theft, theft of public money, theft of U.S. mail, money laundering and filing a false income tax return.
Meanwhile, co-conspirators and Philadelphia men Christopher Hayman and Tyree Holmes pleaded guilty to conspiring to commit bank fraud.
Reed admitted to stealing checks from the mail while working at the U.S. Postal Service Camden Carrier Annex in New Jersey. Authorities say some of the stolen checks were passed to Holmes and Dante Ford, who promoted them on social media and resold them to other people. Reed also gave stolen checks directly to Holmes and others so they could fraudulently cash or deposit them.
In one case, Reed stole a United States Treasury check worth $686,541.88 in December 2022 and handed it over to Holmes. The check was payable to a business in Pennsauken, New Jersey.
Hayman pretended to be the CEO of the Pennsauken business and used that false identity to open a business bank account in the company’s name before depositing the stolen Treasury check and withdrawing a substantial amount of money. But the bank detected the fraud and shut down the account.
Reed also admitted that he created and used a stolen identity to open financial accounts, which he then used to launder some of the criminal proceeds.
In addition, Reed admitted that he failed to report hundreds of thousands of dollars in illegal income on his tax returns.
Authorities say the bank fraud conspiracy caused more than $2.4 million in actual losses and was intended to cause more than $20 million in losses.
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