Tax Fraud Blotter: Five random dependents
More than $1 million bilked in Mass. taxes; dead wrongs; life goes on (trial); and other highlights of recent tax cases.
Chester, Va.: Preparer Crystal Charmae Jackson, 44, has pleaded guilty to filing false returns.
According to documents filed with the plea agreement, Jackson admitted to conspiring with preparer David Wayne Schneider to file false returns on behalf of clients that contained false entries as to clients’ Schedule C income as well as clients’ dependents.
These false entries inflated refunds to clients, and on many occasions those refunds were deposited into the bank accounts of Zimmerman Bail Bonding, a company owned by Schneider.
In April 2016, Schneider was sentenced to two years in prison and ordered to pay $515,104.74 in restitution to the IRS.
Jackson, who pleaded guilty to conspiracy to submit false claims and making false claims, faces a maximum of 15 years in prison when sentenced on Sept. 12.
Port St. Lucie, Fla.: Local resident Dianne Mowatt, 39, has been sentenced to 30 months in prison, to be followed by one year of supervised release, after pleading guilty to assisting in the preparation of false tax returns and filing false tax returns.
Mowatt was charged in a 52-count indictment with running a fraudulent prep business to file phony returns on behalf of her clients and for filing false individual returns on her own behalf. In March, she pleaded guilty to five of the counts.
According to the indictment and plea documents, from tax years 2011 through 2014 Mowatt owned, operated or provided services to Mowatt Financial Services and Proven Tax Services, both prep businesses in Port St. Lucie and Miami. Mowatt prepared and submitted 1040s with accompanying schedules to the IRS on behalf of clients, claiming false deductions and credits for tax years 2011 through 2014.
She also filed false individual returns for herself for the tax years 2010 and 2011 by falsely claiming five different people as her dependents.
Gloucester, Mass.: John Carr Jr., 69, owner of Boston Business Services, a provider of payroll and tax services, has pleaded guilty to failing to pay state withholding taxes for clients, according to published reports.
Carr reportedly pleaded guilty to the 25 counts in his indictment: 23 counts of willful failure by a preparer to pay over tax and two counts of willful delivery of a false tax return.
State prosecutors alleged that between 2010 and 2014, Carr impounded tax payments from his clients but failed to pay the Massachusetts Department of Revenue $1.38 million in state withholding taxes and then purposely filed tax returns that understated the amount of income the withholding clients owed to the state, reports said, adding that authorities began investigating Carr in January 2016 on a referral from the state Department of Revenue, which began its own investigation after four business clients of Boston Business Services filed complaints in early 2015.
Sentencing is June 14 when authorities will explore the remaining restitution due Carr’s clients, according to news reports that added he faces up to three years of imprisonment and $100,000 for each count of failure to pay the withholding tax and up to one year in prison and $10,000 in fines for each count of filing a false tax return.
El Cerrito, Calif.: Local resident Brandon Robinson, 35, has been sentenced to 54 months in prison for aggravated ID theft and conspiring to steal government funds after using the names of the deceased to file federal tax returns seeking refunds.
According to court documents, from about August 2013 through April 2015 Robinson also paid cashiers at stores to cash the refund checks, and also cashed stolen refund and Social Security checks intended for other individuals.
Robinson admitted that he and his co-conspirators attempted to cash more than $500,000 in fraudulently obtained and stolen checks.
He was also ordered to serve 36 months of supervised release and pay $30,119 restitution to the IRS.
Dover, Mass.: Insurance broker Anthony J. May, 62, has been convicted of filing false tax returns.
According to the evidence at trial, May owned and operated Clients First Financial Insurance Agency, through which he sold life insurance products as a broker, and Advantage Life Settlements, through which he served as a broker for insured individuals looking to sell their personal life insurance policies to third-party investors.
May filed false 2008 and 2009 individual income tax returns that did not report $396,554 in income that he received from insurance commissions, broker fees and lease rental payments.
Sentencing is Oct. 2, when May faces a maximum of three years in prison on each count as well as a period of supervised release, restitution and monetary penalties.