Tax Fraud Blotter: Steal thyself
Losing bets; out on a limb; Perfect no more; and other highlights of recent tax cases.
Newark, New Jersey: Preparer Wayne Dunich-Kolb, 54, has been sentenced to six years in prison for filing false federal income tax returns, stealing client refunds and committing identity theft in connection with refunds stolen from a deceased taxpayer.
Dunich-Kolb operated a prep business through which he prepared and filed returns through various entities that he ran from his former residences in Saddle River and Montvale, New Jersey. Dunich-Kolb also maintained a post office box in Las Vegas that he used in connection with his prep business.
He caused many of his clients to form partnerships or corporations that existed in name only and had no business purpose other than to falsely reduce tax liability. He prepared fraudulent business returns for clients by fabricating and inflating expenses, and falsified clients’ individual federal income tax returns, partnership returns and corporation returns by fabricating and inflating business and partnership losses, deductions for unreimbursed employee business expenses and expenses and cost basis of rental properties.
Dunich-Kolb also falsified his own personal federal returns, substantially underreporting income from his prep and accounting business. For tax year 2008, he received gross income totaling some $638,000 while claiming income of $489.
Without authorization, he used the Social Security numbers of the deceased client and another client on IRS forms claiming that the latter client was entitled to the deceased’s refunds for tax years 2013 and 2014 and having the checks mailed to the Las Vegas postal box. Dunich-Kolb deposited the checks into accounts that he controlled.
Dunich-Kolb was also sentenced to three years of supervised release and was ordered to pay $2.2 million in restitution to the IRS.
Las Vegas: Businessman Ramon Desage, 69, who pleaded guilty to committing a $28 million tax fraud, has been sentenced to three years in prison.
Desage admitted that from about Jan. 1, 2006, through about Oct. 20, 2010, he conspired with his bookkeeper, co-defendant Gary Parkinson, and his tax preparer, co-defendant Peter Akaragian, to cause fraudulent federal income tax returns to be filed for himself and his entities for tax years 2006 through 2009.
Desage omitted tens of millions of dollars in income from his returns and created false business deductions to further avoid paying income taxes. The false deductions that Desage and his co-conspirators claimed in the returns reclassified personal expenses as business expenses, claiming fraudulent deductions for luxury cars, houses, jewelry, millions in gambling debts, private plane travel, home improvements and lavish gifts for Desage’s girlfriends and acquaintances.
Desage’s tax due was some $28.2 million for tax years 2006 through 2009.
Akaragian pleaded guilty and was sentenced in October 2018 , and Parkinson is scheduled to begin a jury trial in January 2020. Desage was also ordered to pay $28,221,767 in restitution to the IRS and was sentenced to three years of supervised release upon his release from prison.
Pierz, Minnesota: Business owner Jeffrey Lawrence Kloss, 38, has pleaded guilty to one count of tax evasion.
Kloss owned and operated a tree-trimming business and from January 2014 through at least December 2017 cashed checks from customers payable to his business and failed to include those funds as business income on his federal income tax returns.
He failed to report some $467,555 in income for calendar years 2014 through 2017 and evaded assessment of some $152,923 in federal income taxes.
Las Vegas: Preparer Michael A. Sandoval has pleaded guilty to multiple tax crimes that caused a total tax loss of more than $3.4 million.
Sandoval provided payroll and tax preparation services for individuals and companies through his business, Nevada Financial Solutions Inc., and used NFS to commit multiple tax crimes. When two of his clients provided NFS with $471,178 in payments to be forwarded to the IRS for their quarterly employment taxes, Sandoval instead spent the funds for his personal benefit. Sandoval also filed and caused the filing of false individual income tax returns for a substantial number of clients by reporting fraudulent deductions, including false Schedule C losses and charitable contributions, and state and local tax deductions. These deductions caused a tax loss of more than $2.8 million. He also understated his income from NFS on his individual income tax returns for 2010 through 2017, causing an additional tax loss of $100,138.
In total, Sandoval caused a tax loss of $3,425,654.
Sentencing is Jan. 9. Sandoval faces a maximum of five years in prison on a tax evasion charge and three years in prison for each false tax return charge. He also faces a period of supervised release, restitution and monetary penalties.
Star, North Carolina: Dr. David Russell, 66, has been sentenced to a year and a day in prison for evading payment of his income taxes.
From May 2012 to December 2015, Russell took several actions to evade payment of federal income taxes, interest and penalties he accrued over the six previous tax years.
He ignored an IRS summons to appear before a collections officer with his financial records. After the IRS obtained a court order compelling Russell to comply with the summons, he provided minimal information and omitted records related to any financial accounts and assets he may have had. Russell also hid his assets by depositing his paychecks on a reloadable debit card and having wages issued in the name of a company he controlled rather than directly to himself. He also used a business to pay personal expenses and failed to timely pay the taxes due for the years 2013 through 2015.
Russell was also ordered to serve a year of supervised release and to pay a $10,000 fine. Restitution will be ordered at a later date.
New Haven, Connecticut: Preparer Devon Williams, 30, of Atlanta, has pleaded guilty to preparing false returns.
Williams formerly owned and operated Perfect Preparers, a prep business in New Haven. Between approximately 2014 and 2017, Williams prepared numerous federal returns for clients that contained false deductions, including deductions for unreimbursed employee expenses, charitable donations, and mortgage interest. Some returns contained false Schedule C information.
Williams pleaded guilty to one count of aiding and assisting in the preparation of a false tax return, an offense that carries a maximum sentence of three years in prison. Sentencing is Dec. 27.
Williams agreed that losses suffered by the IRS as a result of his fraud totaled more than $550,000. Many of his clients’ filed returns will need to be amended.
Philadelphia: Preparer Abdoulaye Coumbassa has pleaded guilty to aiding and assisting in the preparation of a false return.
Coumbassa owned and operated Abbi Tax Services and Accounting and from at least 2012 to 2015 prepared and filed fraudulent 1040s and related forms and schedules on behalf of clients. His indictment alleged that Coumbassa falsified returns by, among other things, attaching false Schedules C that claimed that the client had a business that lost money.
Coumbassa agreed that a reasonable estimate of the total tax loss exceeded $2 million.
Sentencing is Jan. 30, when Coumbassa faces a maximum of three years in prison and a $250,000 fine for aiding in the preparation of a false return. He also faces a period of supervised release, restitution and monetary penalties.
Ellisville, Missouri: Pharmacy owner Rehan A. Rana, 46, has been sentenced to two years in prison and three years of supervised release and been ordered to pay a $100,000 fine and restitution of $751,787 to the IRS and $526,285 to Medicare.
Between 2009 and 2012, Rana and others associated with Allegiance Medical Services, a medical testing laboratory, paid kickbacks to doctors and marketers in exchange for blood and urine specimens that they sent or referred to the lab.
For tax years 2013 to 2015, Rana filed false returns, indicating that he had taxable distributions from his pharmacy of only $667,500 for the three years. In fact, he received more than $4.5 million in that period.