Tax Fraud Blotter: Dead wrongs

One accurate, one false; rotten fruit; security alert; and other highlights of recent tax cases.

Pittsburgh: Tax collector Jeanne Bowser, 63, of Aliquippa, Pennsylvania, has been sentenced to a year and a day in prison to be followed by three years of supervised release after being convicted of wire fraud and filing false income tax returns.

Bowser was the elected tax collector for Center Township, Pennsylvania, and collected taxes for a nearby school district. From about December 2011 until mid-2019, she embezzled some $1,028,183.81 in tax payments by writing checks to herself out of a bank account that was used for tax deposits and by stealing cash tax payments. She also filed false income tax returns for six years.

Kissimmee, Florida: Tax preparer Marcos Antonio Tejeda has been sentenced to 18 months in prison for preparing false returns for himself and others.

Tejeda, who pleaded guilty in December, owned and operated a tax prep and accounting business and provided personal and business services for a specific client in 2016, 2017 and 2018. Tejeda maintained a business bank account into which the client deposited money for estimated federal tax payments.

In 2016 and 2017, Tejeda prepared a 1040 for the client; each year Tejeda prepared two versions of the same return, one he claimed was accurate and one he knew was false. The accurate return included the estimated tax payments that the client made and was predominately correct. This first version in both 2016 and 2017 also showed that the client owed money in addition to the money he had paid in estimated tax payments.

Tejeda then created and filed a second, fraudulent federal return for tax years 2016 and 2017. These returns misrepresented the client’s business gross receipts, capital gains, gross income, adjusted gross income and other statutory adjustments to fraudulently decrease the taxes owed. Tejeda embezzled the money that the client had provided for estimated tax payments and to pay the taxes believed owed based on the first version of the return.

In total, Tejeda embezzled $120,329.46 from the client. Additionally, he didn’t report a substantial amount of his income on his personal or business taxes.

Smyrna, Georgia: Resident Tamar Lee has been sentenced to 51 months in prison to be followed by three years of supervised release and ordered to pay $306,316.22 in restitution for conspiring to present false claims for refunds to the IRS.

Lee and conspirator Don Terry obtained names and personal ID information for individuals without their knowledge and consent. Many of the victims lived outside of Georgia, some residing in shelters or prison at the time the returns were filed. Lee and Terry provided the victims’ information to a now-deceased conspirator, a local tax preparer with her own prep business.

The fraudulent 1040s were prepared and e-filed from the conspirator’s business. The returns included false W-2s listing employers for whom the victims did not work and claimed refunds based on false federal withholdings. The preparer also used a refund transfer service, Refund Advantage, that allowed the conspirator to print refund checks at her business.

When the IRS paid refunds, the preparer printed the checks and gave them to Terry and Lee who then deposited them into bank accounts that Lee controlled; Lee paid the co-conspirators a portion of the money.

Lee also used one of her existing companies to file 1120s that falsely claimed refunds based on bogus fuel tax credits. The IRS paid one of the requested refunds by depositing the funds into Lee’s bank account.

Lee, Terry and another conspirator, Jeffrey Smith, also schemed to submit corporate income tax returns that made false claims for refunds. They provided to the deceased tax preparer information for other existing companies and for companies they created for this scheme to prepare and file fraudulent 1120s. These returns all falsely claimed refunds based on undeserved fuel tax credits.

Overall, the fraud resulted in false claims for refunds of more than $2 million over three and a half years; the IRS paid more than $1 million in refunds.

Smith was previously sentenced to 37 months in prison to be followed by three years of supervised release and ordered to pay $695,191 in restitution. Terry was sentenced to two years in prison to be followed by three years of supervised release and ordered to pay $1,332,115 in restitution.

Chelan Falls, Washington: Former resident Jose L. Echeverria has been extradited from Mexico to serve a 30-month prison sentence he received in absentia almost five years ago for filing a fraudulent return.

From 2009 through 2012, Echeverria owned and operated a produce sales business. He filed fraudulent individual federal income tax returns for these years, underreporting the income he received from his business by $564,292. During this time, Echeverria wired hundreds of thousands of dollars in unreported income to an account in Mexico that he used to purchase land, vacation homes and vehicles.

Following his guilty plea to filing a false return some five years ago, the district court granted him permission to travel to Mexico for two months while he awaited sentencing. Echeverria did not return to the U.S. for the sentencing hearing. In September 2017, Echeverria was sentenced in absentia to 30 months in prison and a year of supervised release and ordered to pay $183,191 in restitution to the IRS.

Echeverria lived in Mexico as a fugitive for nearly five years until arrested by Mexican authorities and extradited to the U.S.

Chicago: Tax preparer Eunice Salley, a.k.a. Eunice Sally Dobyns, Oya Awanata-Bey and Oya Awanata, 37, have been found guilty on 29 counts, including pension fraud, embezzlement, mail fraud and tax charges.

A jury convicted her for cashing her deceased grandmother’s pension checks and preparing false returns.

In 2016 and 2017, Salley prepared and filed 22 false federal individual income tax returns on behalf of clients. The returns, which sought more than $1 million in refunds, contained fictitious wages and withholdings as well as false medical, charitable and employment expenses. Salley demanded that many of her clients pay her up to half of the refund in addition to her regular prep fee.

Evidence showed that Salley’s grandmother had died in 2009 and the grandmother’s monthly pension checks continued to come to the residence where Salley lived. From January 2013 to December 2017, 33 pension checks totaling $14,131 were issued to the grandmother and deposited into one of six bank accounts opened and controlled by Salley. On several occasions, Salley notarized and submitted to the pension plan administrator affidavits under her grandmother’s name, fraudulently affirming that the grandmother was alive.

Salley did not report approximately $5,000 in income she received in 2017 from the pension checks that she embezzled.

Sentencing is July 21, when she faces a maximum of 30 years in prison for mail fraud, five years in prison for each count of theft from an employee benefit plan, three years for each count of aiding and assisting the filing of a false return and three years for filing a false return.

Sunrise Beach, Missouri: Security services exec Rex Tarwater has pleaded guilty to failing to pay more than $2.8 million in payroll taxes from his business and more than $1.1 million in personal income taxes.

He owns Semper Blue Professional Services, which provides off-duty police security for public venues. Tarwater admitted that he failed to pay over federal payroll taxes withheld from employees’ paychecks.

From 2015 through 2020, Semper Blue withheld more than $1.9 million in taxes from employees’ paychecks but made no payments to the IRS. The tax loss totaled $2,739,712.

Tarwater also admitted that he failed to file personal income tax returns in tax years 2015 through 2020. The total personal income tax loss was $1,199,611.

He faces up to six years in prison.

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