Posts Tagged ‘tax fraud’

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Government Contractor Sentenced for Failing to File Tax Returns for Four Years

Monday, September 26th, 2011

On December 20, 2010, in Baltimore, Md., Joseph Van Gieson, of Annapolis, was sentenced to 12 months in prison, of which six months is to be served in home detention, followed by one year of supervised release and ordered to pay a $4,000 fine.  According to court documents, since 2003, he worked as a self-employed consultant for the United States Department of Justice and the Environmental Protection Agency.  From 2003 through 2006, he and his wife received gross income of $851,747, and incurred a tax liability of $214,794. Van Gieson requested, and was granted, extensions for filing his federal tax returns for years 2003 through 2005, but he did not file a tax return for any of those years.

 

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Indiana Construction Company Owner Sentenced for Tax Evasion

Monday, September 19th, 2011

On July 1, 2010, in Indianapolis, Ind., David W. Pittman, of Greenwood, was sentenced to 12 months in prison, 18 months’ home detention and two years of supervised release following his plea of guilty to income tax evasion. He must also cooperate with the IRS in determining his income tax liabilities.  Pittman, the owner/operator of Pittman Framing, a residential construction framing company, failed to file income tax returns for the years 1994 through 1998.  The IRS assessed the income tax owed by Pittman for each of these years, but he took steps to evade the payment of these assessed taxes.  The total income tax deficiency owed by Pittman is approximately $497,000.  Pittman also failed to file income tax returns for the years 2003 through 2005 and 2007.  The total income owed by Pittman for those years approximately $48,000.

 

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Identity Theft Fraud Skyrockets

Monday, August 15th, 2011

IRS Discovers Over 245,000 Cases…

How secure do you think your Social Security number is? In 2008, the Government Accountability Office reported less than 52,000 cases of identity theft fraud cases. In 2010, the amount reported by the GAO had increased by 193,000.

Delays in detecting these frauds means the numbers do not accurately represent the true number. When someone uses your number to obtain a tax refund, avoid taxes or to get work, it causes problems for you with the IRS. The victims have no way to protect themselves and the cases can prove difficult to resolve.
The IRS set up a special unit to handle and assist victims, but some of the laws make it hard for the IRS to stop the abuse. Privacy laws protect the ones perpetrating the frauds, and the IRS cannot share important information with other federal agencies.

For instance, the IRS cannot share the name of the perpetrator or give information on where they work. All of these issues make it tricky for anyone to resolve the cases.

When someone uses your number to obtain a job, it appears to the IRS that you have unclaimed income. If the perpetrator sends in a tax return using your number, it triggers an alert, which will delay your legitimate return.

The fact that the IRS can catch these frauds is due to improved screening programs. Once the fraud is discovered, the IRS’s special unit takes over to help the victims. Assigning special identification numbers helps protect the known victim’s returns.

The Federal Trade Commission put together a list of ways that the perpetrator can steal your number.

The list of things to watch for includes; people who have access or can hack into your records, stolen mail or wallet, people who ask for personal information whether in person, email or phone, and retrieving documents from your garbage.

You can help protect your Social Security number in several ways. Invest in a good shredder, and keep your eyes and ears open at all times. You never know when or where someone may try to obtain your personal information.

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Two Defendants Sentenced in $1.2 Million Money Laundering Scheme

Monday, August 8th, 2011

On October 26, 2010, in Charlotte, N.C., Donald Eugene Bess, of Bessemer City, was sentenced to 24 months in prison and ordered to pay $549,789 in restitution.  On June 7, 2010, Ray Eugene Rohm, of Dallas, North Carolina, was sentenced to 24 months in prison and ordered to pay $842,288 in restitution.  In addition, each defendant was ordered to forfeit all property involved in the money laundering conspiracy. According to court documents, Rohm owned and operated Rohm Enterprises, a window treatment services business and Bess operated a body shop business named Bess Used Car Wrecker Service.  From in or about April 2001 to in or about January 2007, both deposited into their respective business accounts $1.2 million in fraudulently obtained checks generated by a former claims manager of Farm Bureau Insurance.  Although they’re aware that the checks were obtained through an insurance fraud scheme, they deposited the checks on his behalf & collected a fee in return for conducting the financial transaction.

 

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Florida Prisoners Lead the Nation in IRS Payment Scam

Monday, July 4th, 2011

Inmates Received $39.1 Million by Filing Fraudulent Tax Returns…

Recently, Hillsborough County jails have been coming down hard on inmates that have been attempting to claim tax refunds for themselves by way of stolen identity. Several pages of employee tax information, which contained annual earnings information, SSAN (Social Security Account Number), and stacks of IRS Form 1040 EZs were found in their facilities.

Officials have said this has been an ongoing problem for years in state  prisons , and now it’s trickling down into the county jails. A prisoner by the name of Brian Singletery was recently transferred to a  Hillsborough County for an appeal, where he taught his new fellow inmates how they could easily mislead the IRS into believing they were different individuals.

Singletery had an entire instruction manual, which included detailed calculations, tax identification numbers, and instructions on how to steal the information.

Officials from various jails in Hillsborough County have caught 12 inmates thus far, but it is hard to find the alleged unless they are caught in the act.

It’s tough to gather evidence until long after the damage has already been done.

So officials presented the information to the IRS, who, in turn, seemed to show little interest. Amounts are not huge, but dollars add up over time, and funds are then deposited into fake accounts. Inmates will also pad their personal canteen money in jail (money typically used for personal items that are typically capped out at specified amounts). That’s your hard-earned tax dollars at work.

Today it’s getting tough for anyone to get a job, and we are all out busting our backs while these guys are using another scam to skim more off Uncle Sam.

They have been convicted of crimes already, now they are taking up already valuable tax payer space in state prisons, and then they arrive at county jails to continue suckling off the government and getting refunds as if they were rewards for doing time.

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Felons Scam IRS for Millions in 2009 

Wednesday, May 4th, 2011

A federal audit revealed that in 2009 inmates received nearly forty million dollars in tax refunds by filing fraudulent tax returns with the IRS. Florida, California, and Georgia account for roughly half of the total amount refunded. This is due in part to their large prison populations.

Though the audit revealed the fraud, it can take years for the IRS to recover the funds.  A 2008 law was passed to make it easier to track this type of fraud, but legal questions and challenges have slowed its implementation.

Most prisoners do not earn enough to have to file tax returns, while others earn income on outside investments that do allow them to qualify for legitimate refunds. This can make it difficult to sort the fraudulent refunds from the legitimate ones.
Tax fraud by prisoners is on the rise up from $13.1 million in 2004. Though this type of fraud is nothing new, the tools prisoners are using have become more sophisticated.

The fraudulent returns are filed either using the information of other prisoners, or outside victims of identity theft. They then file false returns that can result in thousands of dollars per refund.

Newer technology has made this easier. Felons can gather information on bankrupt businesses online and list them as employers. It is difficult for the IRS to verify reported earnings once a business has gone under.
Most of the scams are run by small groups of prisoners and often result in tens of thousands of dollars. In an effort to cut down on these types of scams a 2008 law allowed the IRS to share information with state and federal prison officials.

The law has not gone into effect due to questions surrounding whether the prisons could disclose the tax information to prisoners and their lawyers.

IRS and Prison officials continue to try to better coordinate their efforts to catch the false returns. One of the challenges for the IRS is maintaining an accurate record of current prisoners, though plans for increased data sharing are on the drawing board.

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Ohio Physician Sentenced for Failing to File Income

Monday, January 24th, 2011

On August 6, 2010, in Dayton, Ohio, Dominic Joseph Maga, a physician, was sentenced to 18 months in prison,  and ordered to pay $160,955 in restitution to the Internal Revenue Service (IRS).  A federal court jury convicted Maga on August 6, 2009 of five counts of failure to file income tax returns disclosing more than $1.1 million in income from hospitals.  According to court documents, Maga was an emergency room doctor employed at Grandview Medical Center and Southview Hospital, as well as Riverside Hospital and Grant Medical Center in Columbus, Ohio.  Trial evidence showed that Maga failed to file federal income tax returns disclosing $1,159,431 in income for tax years 2002 through 2006.

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What You Never Want to Have In Common With Jennifer Lopez

Sunday, December 5th, 2010

             Do you owe back taxes?  If so, realize that you’re not alone.  Even the world’s richest and most popular people owe back taxes, too.  And the IRS will get their money, regardless of who you are.  Just ask Jennifer Lopez.

             Here’s what El Pais, the most widely newspaper in Spain, had to say in 2007 about singer Marc Anthony, husband of singer/actress Jennifer Lopez:

             “At least three companies he owns have not paid their taxes correctly and have been told to pay $2.5 million to the state and city of New York. They will also have to pay an additional $180,000 in fines.”

“So much for anyone being “above the law”.  The IRS usually always gets their man, eventually (even if he spends a lot of time walking down the red carpet…).

What are back taxes?  And why should you worry about them?  Back taxes are simply taxes  you owe that were not paid when they were due.

If you’ve underpaid taxes for any reason, the balance that you owe is considered back tax.  You may have failed to report taxable income (intentionally or unintentionally, it doesn’t matter) – as the IRS sees it…you still owe them money in the form of a back tax.

Some people don’t have the money when the tax bill comes around, so they just don’t pay.  They may plan on paying the money when they’re able…but that time never seems to come around.

If nothing seems to happen or they don’t get ‘caught’, some people start believing that they’ve somehow slipped under the radar of the IRS and that they’re getting away with it.  They’re not.  In fact it might take years for the IRS to come after you. 

How do you know your back tax problem is getting serious? Here’s how it happens:

-You’ll get sent a Notice and Demand for Payment from the IRS.

-You either pay or don’t pay the tax.

-If you don’t pay, you’ll be sent a Final Notice of Intent to Levy and Notice of Your Right to a Hearing at least 30 days before the levy.

That’s when you know you’ve got big problems.  That means in 30 days, the IRS is going to start helping themselves to the money in your bank account.  If you’ve received a Final Notice of Intent to Levy, you need to take action immediately.

Even if you haven’t been notified yet … you will be.  If you owe back taxes, even if you haven’t received your first Notice and Demand for Payment from the IRS, eventually you will.  And the worst part is that there are interest and penalties that are adding up everyday that you don’t pay.  Ignoring the problem makes it worse…by the day.

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First of Eight Taqueria Arandas Restaurant Owners Sentenced for Filing False Income Tax Returns

Tuesday, November 9th, 2010

On April 8, 2009, in Houston, Texas, Carlos Garcia was sentenced to a year and one day in federal prison and ordered to pay $245,786 in restitution above the $700,000 already paid for filing false income tax returns for Taqueria Arandas No. 12 Inc., through which he operated a restaurant at 10403-A Gulf Freeway in Houston. Garcia pleaded guilty on October 24, 2008, admitting in pleadings filed that day that he had filed Corporate Income Tax Returns for Taqueria Arandas No. 12 Inc., for tax years 2001 through 2004 that under-reported sales by approximately $2,813,156. He also admitted that, as a result, he and his corporation underpaid income taxes by approximately $945,786. Prior to his sentencing, Garcia paid the Internal Revenue Service $700,000 in delinquent taxes. Garcia is the first of eight local Taqueria Arnadas Restaurant owners to be sentenced.

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You’re Not Guilty of One of These, Are You?

Wednesday, October 20th, 2010

When the IRS prosecutes, tax evasion is not always the only charge (if it’s charged at all).  In fact, there are cases where the person who has been found guilty of one crime may also be charged with violating other laws.

 The Justice Department asks the prosecutor to choose a “lead charge” in all the cases they present.  Here’s a list of some of the “lead charges” that are often brought to court in IRS cases:

 1. Conspiracy to Defraud the U.S:

 Entering into an agreement or conspiracy with another to cheat the government out of taxes deceitfully. The penalty – up to 10 years in prison and/or a fine.

2. Fraud & False Statements 

Knowingly covering up a fact by using a trick, scheme, or false writing or document.  The penalty – up to 5 years in prison and/or a fine.

 3. Willful Failure-To-File

The willful failure to pay the estimated tax at the time required by law.  The penalty - up to one year in  prison and/or up to $25,000 in fines ($100,000 in the case of a corporation).

 Do You See Yourself In Any of These Stories? 

All of these are true stories, taken from official Government Records.  When you read this, do you see yourself in any of the actions that these people have taken?

 A couple puts their money in a “trust” to avoid detection…a business owner tries to hide his cash through paper corporations and off-shore accounts…a business owner simply ignores the warnings of his own payroll service…

 Do you have something in your past that’s going to come back and haunt you?  Is the IRS going to come after you?

 Don’t spend your life wondering if you’re going to be the next story posted on the IRS’ website and/or published on the front page of your local paper.

 Make it right while you still have the time…

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