Tax Fraud Blotter: ‘One fire too many’

Accounting

One fire too many; FedEx con; the bank of me me me; and other highlights of recent tax cases.

Charlotte, North Carolina: Tax preparer Andrivia Wells, 54, has been sentenced to 70 months in prison for tax fraud.

Beginning in at least 2011 and continuing through June 2019, Wells owned and operated the tax prep business Rush Tax Service. Between 2013 and 2017, she prepared or caused to be prepared more than 6,000 returns that falsely claimed more than $3 million in refunds.

Wells and Rush Tax Service received more than $1.2 million in fees from clients, the fees taken directly from the clients’ refunds. In many cases the clients were unaware of how much they were being charged, which was frequently more than $500.

Wells prepared income tax returns for clients for 2013 through 2018 that claimed false filing statuses, false American Opportunity Tax Credits and education credits and false fuel tax credits, among others, to inflate federal refunds.

She also falsified her own income tax returns by underreporting her fees earned for tax years 2014, 2015, 2016 and 2017; in 2018, she failed to file any federal return for herself. In addition, her 2012 through 2017 returns also falsely claimed American Opportunity Tax Credits and fuel tax credits and the incorrect filing status.

In May 2017, after being notified that she was the subject of an investigation and after being served a summons for records of Rush Tax Service, a fire was intentionally set at one of the practice’s locations, destroying client files, financial records and computer hardware. Shortly after the arrest of Wells in the summer of 2019, a second fire was intentionally set that destroyed Rush documents that were called for in a grand jury subpoena.

At her recent sentencing, the court found that Wells had obstructed the administration of justice and that this was “one fire too many.”

Wells, a.k.a. Tina Smith, Tina Harris, Andrivia Smith and Andrivia Harris, was also ordered to serve a year under court supervision and pay $3,373,595 in restitution.

Albany, New York: Betty J. Marriott, of Gansevoort, New York, has been sentenced to a year of probation and ordered to pay $280,413 in restitution, following her conviction on four counts of filing false returns.

Her conviction related to business income and rental payments she earned through a Saratoga County company that places home health care aides in patients’ homes. Marriott owned and operated the company until 2016 and collected monthly rental payments from the company in 2017. She admitted to filing returns in tax years 2014 through 2016 that underreported income from the business.

Following Marriott’s sale of the company in 2016, she also failed in 2016 and 2017 to declare the income she received through rental payments the company paid her monthly.

Marriott admitted to underreporting $1,019,444, resulting in a loss to the government of at least $280,413.

Elizabeth Doyle, of Ballston Lake, New York, to whom Marriott sold the company in 2016, also pleaded guilty to filing false returns. Doyle admitted to filing returns that underreported business income in 2016 and 2017. She admitted to underreporting $647,263 in income, resulting in a loss to the federal government of at least $94,522.

Doyle’s sentencing is Feb. 16, when she faces up to three years in prison, a maximum fine of $100,000 and supervised release of up to a year.

Gadsden, Alabama: Tax preparer Jamichael D. Whiteside, 37, has pleaded guilty to preparing false returns on behalf of himself and his clients.

Between tax years 2016 and 2019, Whiteside prepared false returns for several clients at ZJ Tax Service. He falsified dependent care expenses, education expenses and charitable deductions and included fabricated losses for non-existent businesses. Whiteside also underreported his own income in tax years 2016 and 2017.

The total tax loss exceeded $140,000.

Baltimore: Joseph Kukta of Laurel, Delaware, has been sentenced to 42 months in prison, to be followed by three years of supervised release, for interstate transportation of stolen goods and tax evasion in connection with his theft and resale of merchandise being shipped through a commercial mail service.

From 2007 through July 2019, Kukta worked at a FedEx facility in Seaford, Delaware, where he oversaw operation of the facility and earned an annual salary of more than $92,000. He admitted that from 2009 to June 2019 he stole packages shipped via FedEx and resold the items to co-defendant Saurabh Chawla at approximately 50% of the items’ retail price. Kukta then transported the stolen items to a relative of Chawla in Maryland.

From about 2009 to 2019, Kukta received more than $1,880,000 in illegal proceeds for selling stolen goods that were worth at least $3,250,000.

Kukta admitted that he failed to report that income on his annual joint federal income tax returns, causing a tax loss to the United States totaling $660,439.

To conceal the income, Kukta provided false information to two banks when they questioned why he was receiving money from a company controlled by Chawla. Kukta falsely told bank representatives that he had been selling items from his father’s estate. Kukta also provided false information to the IRS during a correspondence audit, claiming that the items he had sold on eBay during 2014 were from his father’s estate.

Kukta was also ordered to pay $1,101,743.91 in restitution and to forfeit $1,880,000.

Chawla, of Aurora, Colorado, was previously sentenced to 66 months in prison for conspiracy, interstate transportation of stolen goods and tax evasion. Chawla was also ordered to pay $713,619 in restitution to the IRS and ordered to forfeit a car and $2,308,062.61 from accounts held in his name and the sale of property in Colorado.

Boston: Former bank manager Christian Zynga has pleaded guilty to falsely inflating federal income tax refunds and diverting a portion of those refunds to accounts controlled by him and others.

From 2012 to 2018 Zynga, formerly of Everett, Massachusetts, and an alleged conspirator held the latter out to be a tax professional, particularly for the Congolese community of greater Boston. It is alleged that until 2017, they took their clients’ information to a legitimate tax professional and, to inflate the federal refunds, provided that professional with false information concerning their clients’ dependents, dependent and child care expenses, and business income and losses. They then allegedly caused the refunds to be split between the clients’ bank accounts and accounts they and their conspirators controlled.

From 2017 to 2018, Zynga and his conspirator allegedly prepared clients’ returns themselves while continuing to inflate refunds by adding false information to the returns and diverting a portion of the refunds to themselves or accounts they or their co-conspirators controlled.

Among other schemes, Zynga, who worked as a bank manager, opened accounts in others’ names for receiving fraudulent federal refunds. He also provided the names and Social Security numbers of children of an associate so they could be falsely listed as dependents on returns.

Zynga’s sentencing is Feb. 17. Conspiracy to defraud the U.S. carries up to five years in prison, three years of supervised release and a fine of $250,000 or twice the gross gain or loss.

Durham, North Carolina: Tax preparer Andrea Pasley has been sentenced to 20 months in prison for conspiring to defraud the IRS.

From 2012 through 2017, Pasley conspired with Karen Jones and Audrey Odom to prepare fraudulent returns for clients. The returns claimed false education credits or dependents or manipulated the clients’ income to qualify for larger Earned Income Tax Credits. Some clients were charged up to $3,000 for preparing returns. The conspirators caused a tax loss of some $1.2 million.

Pasley was also ordered to serve three years of supervised release and to pay some $1,264,493 in restitution to the United States.

Jones and Odom pleaded guilty and were sentenced earlier this year.

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