Tax Fraud Blotter: Always some relief in giving up

An airy idea of loans; did they have a deal for you; bar flies; and other highlights of recent tax cases.

Pacific, Washington: Tax preparer Jean Mpouli has been sentenced to a year and a day in prison for 14 counts of aiding and abetting the filing of false returns.

Mpouli, who was previously convicted, worked for 25 years as an inspector for the Federal Aviation Administration while running a tax prep business on the side for hundreds of clients, primarily African immigrants. Mpouli falsely increased deductions for unreimbursed business expenses and educational expenses to boost refunds, and took a percentage of the refund as his fee.

On his personal returns, Mpouli also hid more than $200,000 of revenue generated from his tax prep business.

In late 2016, the IRS noted that an unusually large number of returns prepared by Mpouli claimed deductions for unreimbursed business expenses. In 2017, the IRS sent an undercover officer into the business. Using the W-2 information the undercover officer supplied, Mpouli rightly determined that the agent owed approximately $800 in taxes; Mpouli then offered to enter some $34,000 in fraudulent expenses to increase the officer’s refund to more than $5,600.

Mpouli said the refund was a “loan” should the officer be audited by the IRS. Mpouli then accepted $250 in cash as his fee.

When agents searched his business in September 2017, they found more than 1,200 personal returns on Mpouli’s computers. Hundreds of the returns showed suspiciously high amounts of unreimbursed business expenses and education expenses. When investigators contacted a random sampling of the clients who had used Mpouli’s services, the clients said they were unaware of the extent of the deductions he had claimed on their behalf. The clients also said Mpouli did not discuss the returns with them before filing, and that he refused to help when they were notified that they were being audited.

The government estimated the tax loss to be nearly $3.5 million. During the fraud, Mpouli sent more than $300,000 to his native Cameroon to pay for construction of an apartment building.

Orlando, Florida: Tax preparer Johnson W. Eustache has been sentenced to five years in prison for wire fraud and aiding and assisting in the preparation of false returns.

From March 2020 and through April 2021, Eustache submitted 13 fraudulent applications seeking more than $2.1 million in Economic Injury Disaster Loans or Paycheck Protection Program pandemic-related emergency benefits. He submitted some of these applications in his own name and others in the names of unwitting associates or relatives. He included false statements in each of the applications regarding the applicant’s criminal history, number of employees or total payroll.

Eustache got EIDL and PPP lenders to approve and fund eight loans totaling $1,343,029.50. He did not use these funds for payroll or other qualifying business expenses but to make personal financial investments, purchase real estate and build residential properties.

In addition, between 2017 and 2021, Eustache worked as a tax preparer, during which time he filed 28 returns for taxpayers. Those returns contained false adjustments, false income amounts or false deductions to inflate refunds. The federal tax loss totaled $87,044.

Eustache, who pleaded guilty last year, was also ordered to forfeit some $700,000 seized from several bank accounts, as well as local properties traceable to money from the scheme.

Foresthill, California: A married couple has pleaded guilty to tax-related offenses and agreed to pay more than $605,000 in restitution.

Virendra (Vic) Maharaj, 55, pleaded guilty to willfully failing to file tax return information with the U.S. Treasury related to his receipt of cash while engaged in trade or business. His wife, Rosalin R. Prasad, pleaded guilty to a conspiracy to defraud the U.S. with respect to IRS assessment of income taxes.

Prasad conspired with Maharaj to defraud the IRS in the agency’s attempts to assess the couple’s tax obligations for 2005, 2006 and 2007. Maharaj worked at car dealerships in Sacramento and Woodland, California, in those years and earned substantial income.

Several actions were taken to further the conspiracy. Among other tactics, part of Maharaj’s wages were paid directly to Prasad; part of Maharaj’s compensation was paid directly to Prasad and to Maharaj’s creditors through indirect payments; Maharaj took cash compensation; and Prasad improperly deferred some $270,000 in capital gains related to her purchase of a $1.9 million residence.

Also, Prasad caused false returns to be filed in each of those years and made false statements during an IRS audit.

Prasad conspired to underreport more than $819,000 in income and, in turn, underpay more than $184,000 in federal income taxes. She received substantial refunds in 2005, 2006 and 2007.

Maharaj was an owner, general manager, and salesperson of Maharaja Motors, which operated a used car lot in Woodland, from about 2007 through 2016. In 2015, Maharaj sold a vehicle to a customer and, in turn, received a cash payment of more than $10,000; Maharaj failed to file a Form 8300.

Detroit: A federal court has permanently barred Jennifer Sherman and her local tax prep business, Sherman Management Co. Inc., from preparing federal returns for others.

According to the complaint, Sherman and her company had returns prepared that, among other things, reported false business income and expenses and claimed excessive deductions, resulting in undeserved refunds. The complaint also alleged that Sherman impermissibly lowered some of her clients’ tax liabilities by falsely claiming head of household status.

The complaint maintains that Sherman and her business cost the United States hundreds of thousands of dollars in tax revenue.

Patterson, Louisiana: Tax preparer Dawanna Monay Monroe has been barred permanently from working as a preparer in Louisiana following guilty pleas on multiple fraud charges and a lawsuit filed by the Louisiana Department of Revenue.

She was arrested in 2020 for a tax fraud involving fabricated business losses for companies that did not exist. After Monroe pleaded guilty to charges of filing false public records and illegal transmission of monetary funds, state litigators sued to prevent her from working as a tax preparer in the state.

A consent judgment was signed in December.

Philadelphia: Tax preparer Eric Amaefuna, 65, of King of Prussia, Pennsylvania, has pleaded guilty to engaging in a multiyear scheme to assist clients with filing false income tax returns to fraudulently inflate refunds.

Amaefuna owned the tax prep business American Financial Stewardship; he prepared fraudulent 1040s for clients for at least tax years 2014 through 2016. He claimed false or inflated employee business expenses, inflated state and local taxes, false or inflated miscellaneous deductions, and losses that were fictitious or inflated.

Chicago: Consultant Edward Acevedo has pleaded guilty to attempting to evade and defeat assessment of income taxes.

Acevedo worked as a self-employed consultant. He admitted that he willfully failed to file an individual income tax return for the calendar years 2015 through 2018, causing a loss to the IRS of at least approximately $37,380. Acevedo further admitted that he attempted to evade taxes by avoiding the creation and maintenance of customary business and accounting records.

After discovering that he was under investigation by the IRS, Acevedo provided incomplete information to his accountant concerning his sources of income and expenses.

The offense carries a maximum of five years in prison. Sentencing is March 9.

Source link