Tax Fraud Blotter: Mom made me do it

Accounting

That’s a lot of dimes; divided she fell; mom made me do it; and other highlights of recent tax cases.

Delray Beach, Florida: Tax preparer Michlin Delivrance has pleaded guilty to conspiracy to defraud the United States.

Delivrance owned and operated the tax prep business Tax USA and from at least 2015 through 2019 conspired with Scott Forbes and others at the firm to claim inflated refunds for clients by reporting false income, expenses and itemized deductions. Delivrance charged clients substantial fees to prepare the returns and caused a federal tax loss of $250,000 to $550,000.

Sentencing is Oct. 21, when he faces a maximum of five years in prison, as well as a period of supervised release, restitution and monetary penalties. Forbes pleaded guilty in June.

Fort Oglethorpe, Georgia: Bookkeeper and office manager Alice Sue Smith has been sentenced to 43 months in prison to be followed by three years of supervised release for stealing from her employer and for filing false returns.

Smith worked at Chattanooga Coin Inc. from 2004 to 2018. Starting in 2009, she forged the signatures of company owners on some 1,400 checks that she then cashed. She also created fictitious check stubs in the company’s financial records to cover up her fraud.

In total, she stole some $1.24 million from Chattanooga over nearly a decade.

Smith also failed to report the embezzled funds and other legitimate income on her income tax returns.

She has also been ordered to pay restitution to Chattanooga and the U.S. of some $1.48 million.

Lebanon, Missouri: Attorney Meagan M. Howe, a.k.a. Meagan M. Hasty, has pleaded guilty to tax and labor violations.

Howe owns and operates Conquer the Divide LLC. She is also the past owner and operator of Garner and Howe Law Firm; Missouri Law Firm LLC; and Just Ask Howe Tax Advocacy Services LLC.

She admitted that she withheld $15,019 in federal taxes from her employees’ paychecks at two of the firms in 2019 but failed to turn the money over to the IRS. Howe admitted that she failed to pay an additional $10,285 in employment taxes for the businesses in 2019 and that she falsely prepared and submitted 2018 returns for herself and her husband. By filing separate returns that each claimed head-of-household status, she was able to fraudulently receive $3,775 in Earned Income Tax Credits.

She also admitted that she failed to transmit $3,111 in contributions to an employee pension plan and then lied about it.

Howe must pay restitution to the IRS, the Missouri Department of Revenue and individual victims. She faces up to 10 years in prison.

Lilburn, Georgia: Resident Marquet Mattox has been convicted of filing fraudulent returns in the name of several trusts.

Between 2016 and 2018, Mattox filed at least 30 fraudulent federal income tax returns in the name of at least 11 different trusts. Those returns falsely represented that the trusts had earned interest income and that income taxes had been withheld and paid to the IRS. Mattox then fraudulently requested refunds on behalf of the purported trusts totaling nearly $165 million.

The IRS paid some $5 million of the refunds, which Mattox used to buy a house, expensive furniture and a luxury automobile.

He faces a maximum of 20 years in prison on wire fraud counts, five years on false claims counts and 10 years on the theft of government funds count. He also faces a period of supervised release, restitution, monetary penalties and forfeiture.

Charleston, West Virginia: Misty Brotherton-Tanner, 41, who provided bookkeeping and accounting services for local businesses, has been sentenced to 33 months in prison for felony wire fraud and money laundering and been ordered to pay $537,173 in restitution.

From at least 2014 until 2020, Brotherton-Tanner, who pleaded guilty in April, electronically transferred money and moved the transactions between accounts to hide her fraud. She was not permitted to pay herself from these business accounts but her scheme included listing herself as an employee for the various businesses, setting up fraudulent accounts in the name of fictional workers that she would then add to the accounting software, and misrepresenting that she had paid state and federal taxes for the businesses. Throughout the scheme, Brotherton-Tanner moved the transferred money into her personal checking accounts.

She defrauded various businesses of $537,173. She also stole money for and at the request of her mother Lois Brotherton, who also pleaded guilty for her role in the scheme and was sentenced to probation.

New Orleans: A federal court has permanently enjoined two local tax preparers from preparing returns for others and from owning, operating or franchising any tax prep business in the future.

The court entered judgment against Mario Alexander by default; defendant Leroi Jackson consented to entry of the injunction against him.

Alexander and Jackson, both individually and doing business as The Taxman Financial Services, must send notices of the injunction to each person for whom they prepared federal returns and post the injunctions in places where they conduct business, including social media accounts and websites.

The complaint filed against Alexander and Jackson alleged that they prepared returns claiming fabricated business income and expenses, as well as claiming various false tax deductions and credits, including charitable contributions and education credits. It also alleged that the two fabricated business income or expenses to increase claims for EITCs.

According to the complaint, Alexander and Jackson significantly underreported clients’ tax liabilities, obtained fraudulent refunds and charged exorbitant fees for their services, often without clients’ knowledge.

Phoenix: Thomas Rampetsreiter, previously convicted of conspiracy to file fraudulent returns, has had nine months in prison added to his sentence for failure to appear.

In August 2020, he was sentenced to two years in prison and ordered to pay $2,211,304 in restitution to the IRS. He was ordered to self-surrender to begin his sentence a year ago but failed to self-surrender and was later arrested in Florida. Rampetsreiter was staying in a Florida hotel under an assumed name with a switched license plate on his vehicle. He also had four cellular phones, multiple debit cards and four $1,000 international money orders in his possession.

He was part of a conspiracy in which another preparer was sentenced to 21 months in prison and ordered to pay $2,211,304 in restitution to the IRS.

The scheme involved creating fake entities for clients and fabrication of expenses, deductions and losses to understate or eliminate a client’s taxable income.

West Palm Beach, Florida: A federal court has permanently enjoined tax preparer Nate E. Dameus from preparing federal income tax returns for others and from owning, operating, managing, assisting or working at any prep business in the future.

Dameus stipulated to entry of the injunction. He must send notice of the injunction to each person for whom he prepared federal returns, other tax forms or claims for refund after Jan. 1, 2018, and to advertise the injunction on social media for one year.

The complaint alleged that he employed fraudulent practices in preparing client returns that understated the tax owed and/or overstated the refund.

For example, the complaint alleged, he prepared returns with fabricated withholding and included claims for such bogus unreimbursed employee business expenses as car mileage, tools, cell phone services and meals.

In addition, the complaint alleged that he routinely falsified home improvement expenses on his clients’ returns to claim undeserved residential energy credits.

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