Tax Fraud Blotter: Diabolical duos
What a POS; bad bet; too sick to go to prison; and other highlights of recent tax cases.
Moss Point, Mississippi: Preparer Talvesha Glaude has been sentenced to 22 months in prison for preparing false returns.
She owned and operated a tax prep business under multiple names, including TMG Tax Service and Regional Tax Service. From 2013 through 2019, Glaude prepared federal returns for clients seeking inflated refunds based on fraudulent dependents, federal income tax withholdings and education credits. Glaude also filed false returns for herself for the tax years 2014 through 2018.
She was also ordered to serve a year of supervised release and to pay $183,360 in restitution to the IRS.
Milwaukee: Alberto Fernandez Ramirez and Ana Delia Dominguez have been sentenced to two years in prison for stealing more than $1.7 million in refund checks.
Ramirez and Dominguez, who are married, fraudulently obtained ITINs from the IRS using personal ID documents of citizens in Mexico. They used the ITINs to file false returns that often fraudulently claimed the Additional Child Tax Credit and from approximately 2010 through 2017 received more than $1.7 million worth of refund checks.
The couple, both of whom pled guilty, was also ordered to pay $1,733,677.22 in restitution to the IRS.
Wharton, New Jersey: A couple who owned and operated construction businesses has admitted their roles in filing returns that failed to report all their personal income.
Roger Magill admitted that, between 2014 and 2016, he owned the Magill construction and paving entities, making hundreds of thousands in personal income and attempting to hide it from the IRS using a fictitious ID to cash business checks. He admitted that he evaded paying $261,758 in personal income taxes.
Ruby Magill admitted that she helped Roger Magill by allowing him to deposit his hidden income into business bank accounts that she operated and controlled.
The charges to which Roger Magill pleaded guilty carry a maximum of five years in prison and a $250,000 fine; the charge to which Ruby Magill pleaded guilty carries a maximum of three years in prison and a $250,000 fine. Sentencings are Jan. 20.
Blacklick, Ohio: Former restaurant owner Martin Kao, 38, of Gilbert, Arizona, and formerly of Columbus, Ohio, has pleaded guilty to income tax evasion.
Kao attempted to evade the assessment of income taxes by suppressing the cash sales at Lantern Chinese Restaurant from January 2014 through May 2017. Lantern used a point-of-sale system to process customer sales; Kao suppressed the cash sales and did not deposit the cash into the business bank account. He also used his business bank account and corporate credit cards to pay personal expenses.
Kao underreported his taxable income by $316,957 for the 2014 though 2017 income tax years, resulting in a tax due of $97,058. Income tax evasion carries a maximum of five years in prison and a $250,000 fine.
Council Bluffs, Iowa: Tony Merksick, 43, has been sentenced to three years of probation for filing a false return.
Merksick operated an online bookkeeping operation for gambling. In 2009, he created TJM Enterprises, an S corporation, for reporting a portion of that income from the gambling operation to facilitate obtaining loans, mortgages and other financing.
IRS investigators interviewed clients of Merksick and examined relevant bank accounts to determine the proceeds that he was receiving from his gambling operation. In tax years 2012 and 2013, Merksick reported TJM’s gross receipts totaled $314,206. Investigation revealed that the receipts for 2012 were in fact $501,072.95 and were $233,520.60 for 2013. The tax loss totaled $100,285.00.
Merksick’s probation will include special conditions that he not gamble while on probation and that the first year be served in home confinement. He was also ordered to pay $100,285 in restitution to the IRS.
Collinwood, Tennessee: Preparer Steve Lewis Newell has been sentenced to 21 months in prison for preparing false returns for clients.
Newell owned and controlled Tax Masters and Accounting. Between 2014 and 2018, he prepared and filed more than 7,700 federal income tax returns, several of which contained inflated or fictitious deductions including state and local taxes, charitable contributions and employee business expenses. Newell also falsified other items on clients’ returns, such as the filing status of the taxpayer. The scheme resulted in clients obtaining undeserved refunds and caused a tax loss to the IRS of at least $230,000.
Newell’s tax schemes date back to the 1990s, when he was caught aiding and assisting in the filing of false returns. He eventually pleaded guilty to those charges and was to report to prison in February 2002. Instead he submitted false medical records claiming that he was terminally ill. He also submitted a forged affidavit from a physician that said Newell only had three months to live. Agents later discovered that Newell had fraudulently obtained the records of a patient who had died from colon cancer and altered the records to reflect that he was terminally ill. Agents also discovered that during this period Newell had continued to perform tax work despite an order not to.
Newell pleaded guilty in 2004 to charges arising from that conduct. Also that year, he pleaded guilty to the additional crimes of making false statements to the IRS when he prepared and filed false tax forms for a company for which he was the preparer. For all these crimes he was sentenced to 43 months in prison.
In the most recent case, Newell was ordered to pay $230,066 in restitution to the IRS.
Lexington, Kentucky: Health-care execs Ann Sonderman Giles and Lu Anne Wallace have been sentenced for conspiring to defraud the U.S.
Giles, a former CEO, was sentenced to 30 months and Wallace, a former CFO, was sentenced to 33 months.
From January 2014 through July 2017, the two worked for multiple health-care-related companies. Giles and Wallace admitted to failing to pay over trust fund taxes owed by the companies; the companies also failed to pay over their matching portions of Social Security and Medicare taxes. When the IRS moved to take civil enforcement actions, the two facilitated the transfer of business operations to different LLCs, including changing bank accounts, while continuing to withhold payments of the IRS trust fund taxes that were due each quarter.
Giles and Wallace defrauded the U.S. out of some $1,595,726 in tax revenue.
Evanston, Illinois: Resident Toniece King, who filed dozens of fraudulent returns, some using the IDs of other people, over a two-year period and stole the subsequent refunds, was sentenced to 14 months in prison.
King used her own name and others’ names and Social Security numbers to file fraudulent returns from January 2015 through January 2017. She filed 36 fake returns, claiming more than $160,000 in refunds. More than $65,000 of the refunds were paid.
She was also ordered to make $65,481 in restitution to the IRS and will serve three years of supervised release.
Guilford, Vermont: Businessman Christopher Parker has pleaded guilty to tax evasion.
Parker is the sole proprietor of a building restoration business that generated some $3.35 million in gross revenues between 2014 and 2018. Parker reported only some $2.5 million in gross revenues to the IRS, avoiding paying roughly $281,000 in federal income taxes for that period.
Tax evasion is punishable by up to five years in prison and a fine of up to $100,000. Sentencing is Feb. 15.