Tax evasion blotter: next on the role
Rage against the Machine; Property damage ; herbal remedy; and other highlights of recent tax cases.
Kissimmee, Florida: Tax preparer Joseph Amaya was sentenced to one year in prison for aiding and assisting in the preparation of false returns.
From 2014 to approximately 2018, Amaya co-owned and managed the tax preparation business Tax Machine. Amaya knowingly prepared, filed and trained employees to prepare and file numerous false and fraudulent statements on behalf of clients. He and his employees created bogus expenses or deliberately overestimated deductible expenses such as unreimbursed employee expenses, gasoline, mileage, medical and dental expenses, and gifts to charity. Amaya also trained employees to include false claims of net business losses on returns. The tax loss was approximately $ 1.6 million.
Amaya, who pleaded guilty in February, was also ordered to pay more than $ 1.6 million in restitution to the IRS.
Saint Louis: Tax preparer Tiffany McAllister, 44, of Florissant, Missouri, was sentenced to 37 months in prison and ordered to pay $ 902,854 in restitution after To plead guilty three counts of tax evasion.
McAllister operated a tax preparation service from 2009 to 2019 tax year. During that time, she registered two companies with the Missouri Secretary of State and obtained EINs for them, although she has never carried out any commercial transactions or employed anyone through either company.
From 2014 to 2016, she prepared fraudulent statements claiming that she and some of her clients were receiving salaries and withholding tax from shell companies. She also prepared returns for clients who fraudulently claimed wages and payroll deductions from other shell businesses, losses of independent businesses, and education expenses to inflate federal reimbursements.
McAllister was paid for assisting in the fraudulent preparation of 39 tax returns for the 2014 to 2017 tax years. Federal tax losses totaled $ 920,854.
Las Vegas: Businesswoman Graciela Rueda Alvarez, aka Graciela Masso, has pleaded guilty to filing a false statement.
Alvarez owned and operated All Hose Inc. and All Hose South, distributors of industrial, hydraulic and pneumatic hoses, connectors and fluid transfer systems. From 2013 to 2016, she transferred over $ 950,000 in corporate profits to bank accounts she controlled, but did not report these funds as income on her personal federal returns. The federal tax loss was $ 210,807.
The sentence is pronounced on September 27. She faces a maximum of three years in prison, one year of supervised release and a fine of $ 250,000. Alvarez agreed to pay $ 458,728.52 in restitution, including overdue taxes, interest and penalties.
Kewadin, Michigan: Businesswoman Jessica Marie Dowker has pleaded guilty to willful non-payment of federal employment tax.
Dowker and her husband own Northshore Dock LLC, a boat launch and storage facility that annually employed some 30 regular and seasonal workers and until 2013 collected, reported and sent FICA contributions as required. Between 2013 and 2018, the company continued to deduct payroll taxes from the wages of its workers, but did not file tax returns or remit the money to the IRS. Dowker, who has an accounting degree, was responsible for the company’s tax compliance.
The sentence is pronounced on October 4. She faces up to five years in prison and a fine of $ 250,000. Dowker will pay $ 494,043.30 in restitution to the US Treasury.
Louisville, Kentucky: Resident Frank Littriello has pleaded guilty to two counts of tax evasion.
From 2009 to 2013 and 2016, he purchased two properties with the company’s proceeds (later classified as loans) on behalf of Paramount Real Estate Investments, a company owned by Littriello’s wife. He structured loan payments on these properties to conceal his property from the IRS and evade payroll taxes. The properties were purchased for $ 614,328.15 and $ 112,064.32; the second property was then sold and proceeds of $ 88,600 were deposited into his wife’s account.
Littriello was sentenced to three years’ probation, including six months of house arrest. He admitted a debt of $ 1,510,549.98 to the IRS.
Fort Lauderdale, Florida: Importer Alejandro Gomez, of Broward County, Fla., Has pleaded guilty to tax evasion.
Gomez operated Fleischmann’s Produce, a company that imported fresh herbs for wholesale distribution. Gomez spent approximately $ 896,951 in 2014 and $ 1,051,213 in 2015 to gamble at a Broward County casino. In March 2015, he filed a 2014 federal business return for Fleischmann’s that overestimated the company’s total expenses by falsely reporting the $ 896,951 of gambling expenses as cost of goods sold. The following year, Gomez filed for a business return in 2015 that again incorrectly characterized his gambling expenses as cost of goods sold. He also grossly underreported his personal income for both years.
Gomez caused a tax loss to the IRS of more than $ 545,000.
The sentence is pronounced on September 30, when he faces a maximum of five years in prison. He also faces a period of supervised release, restitution and financial penalties.
Phoenix: Luis Alberto Ortiz-Garcia was sentenced to 28 months in prison and ordered to pay $ 587,367 in restitution to the IRS after pleading guilty to money laundering and illegal use of identification means.
Ortiz-Garcia is a longtime resident of Arizona and has lived in Tucson and Nogales since 2006. Since at least January 2010, he has filed tax returns with the IRS using personal identifying information. other people to generate fraudulent refunds.
He obtained the information by purchasing documents from people living on or near the Mexican border, obtaining them from others involved in the false returns program, or stealing them while providing preparation services. His misrepresentations included falsified wages, employers, tax deductions, fictitious dependents and falsified credit claims.
Between 2010 and 2015, he filed some 203 false tax returns using the identifying information of other people in an attempt to obtain some $ 1,151,491 in fraudulent refunds.
Leonard, New Jersey: Construction executive Peter Alvarez, 54, of Atlantic Highlands, New Jersey, admitted to evading personal income and employment tax.
From 2011 to 2016, Alvarez owned and operated Mr. Demo, a construction and demolition business. Alvarez cashed numerous checks from the company’s clients and used the money, in part, to pay employee salaries. He hid from the IRS his payment of employee salaries and his failure to report, account for and pay employment taxes totaling $ 177,649.
Alvarez filed individual federal income tax returns for 2011 through 2016 in which he falsely and substantially underestimated Mr. Demo’s total gross receipts by not reporting the many customer checks he cashed. For those calendar years, Alvarez owed an additional income tax of $ 432,019 on Mr. Demo’s undeclared gross receipts less eligible salary expenses.
Alvarez agreed to reimburse the IRS for an amount of $ 609,668. He has been charged with one count of employment tax evasion and personal income tax evasion. Each charge carries a maximum penalty of five years in prison and a maximum fine of $ 250,000. The sentence is set for October 28.
Hampton, Virginia: Tax preparer Karl Burden-El Bey (aka Carl L. Burden) was convicted of aiding and assisting in the preparation of false returns, theft of government funds and failure to file federal income tax returns.
From at least 2013 to 2019, he prepared false statements for clients, claiming false dependents, residential energy credits, gifts to charities, deductions and child care expenses and dependents to inflate federal reimbursements. He also stole $ 5,000 by directing a portion of customer refunds to his personal bank account.
It also did not file its individual federal income tax returns from 2013 to 2017.
Burden-El Bey faces a maximum sentence of 10 years in prison for theft of public funds, three years for each count of aiding and assisting in preparing a false statement, and one year for each count. charge of failure to file a return. The sentence is set for December 7.