Tax Fraud: Seven Individuals Convicted of Tax Fraud
Seven Tax Return Preparers Charged, Repeat Offender Sent to Prison
HOUSTON With the deadline for filing income tax returns rapidly approaching, Acting U.S. Attorney Abe Martinez and Special Agent in Charge D. Richard Goss of IRS – Criminal Investigation (CI) have jointly announced seven newly-charged tax return preparers as well as a significant sentencing and delivered a warning to those who are thinking about breaking the law by committing tax crimes.
“Federal law requires everyone to pay their fair share of taxes,” said Martinez. “False tax returns are an attempt to cheat the system, the U.S. Treasury and ultimately the American people. Return preparers have an obligation to seek only the refunds their clients are entitled to and charge a reasonable fee in doing so. Those who abuse their filing privileges will be investigated, caught and prosecuted to the fullest extent of the law. All taxpayers should also exercise caution in selecting preparers on whom they rely in seeking an appropriate refund. If a preparer promises financial dividends that are too good to be true, it may well be and could require a much greater repayment than the excess received.”
“Society places tax practitioners in a position of trust. Their customers provide them with some of their most sensitive personal information. When that trust is violated and the information is abused for fraudulent purposes, it causes significant harm not only to the individuals who are directly victimized but to the entire community,” said Goss. “IRS-CI special agents are working tirelessly to protect taxpayers from fraud and investigate potential unscrupulous tax return preparers.”
One such notable recent case involved a local tax return preparer who was ordered to federal prison for a second time for preparing false tax returns and obstructing the IRS in its enforcement of federal income tax laws.
Cedric Keith Oliphant, who was previously charged with and convicted of preparing dozens of false 2006-08 client tax returns, was released on bond in that case under a condition that he have no involvement in the preparation of tax returns other than his own. However, while awaiting sentencing, Oliphant resumed preparing fraudulent tax returns, attempting to hide his activity by putting the business and bank accounts in other people’s names.
He was sentenced 33 months on the earlier case and released from prison Aug. 26, 2016. A week later, he was taken into custody on the second case and ordered into custody. He later pleaded guilty to those charges and is now serving another 28-month federal prison sentence. He was further ordered to pay more than $725,000 in restitution for both cases. The Financial Litigation Unit of the United States Attorney’s Office has already seized $205,000 in cash, three cars worth $32,600 and Oliphant’s personal residence in Huntsville as partial satisfaction of his restitution obligation.
In addition to this significant sentencing, the U.S. Attorney’s Office has recently filed cases against seven other tax return preparers for aiding and assisting in the preparation and electronic filing of materially false U.S. Individual Income Tax Returns.
Yesterday, authorities arrested Ryan Damont Akers following the return of an indictment charging 15 counts of willfully aiding and assisting in the preparation of false U.S. Individual Income Tax Returns for others. He is expected to make his initial appearance before U.S. Magistrate Judge Nancy Johnson at 2:00 p.m. today. The U.S. Individual Income Tax Returns listed in the indictment cover years 2012 through 2014. The false items variously claimed on the returns include, among others, false amounts of gifts to charity by cash or check, false unreimbursed employee expenses, false losses from sole proprietorships and false Schedule D net long term capital losses, according to the indictment.
Also arrested yesterday was Dale Bradford Harding, charged with 15 counts of willfully aiding and assisting in the preparation of false U.S. Individual Income Tax Returns for others as well as one count of willfully filing a false income tax return for himself. Those tax returns cover years 2010 through 2014, with false items variously claimed on the returns including, among others, false amounts of gifts to charity by cash or check, false unreimbursed employee expenses, false losses from sole proprietorships, false Schedule E losses from partnerships or S corporations and false Schedule D net long term capital losses. He is expected to make an initial appearance in federal court in the near future.
Another recent filing includes the case against Yomi Michael John, doing business in Houston as Postal Tax Services. He is charged by criminal information alleging that during calendar years 2010 through 2013, he aided and assisted in the preparation and electronic filing of dozens of materially false 2009 through 2012 U.S. Individual Income Tax Returns for unsuspecting clients. John allegedly included materially false income, expenses, deductions and credits in these tax returns in order to generated at least $214,413 in excessive refunds. John kept a portion of the fraudulent refunds as preparation fees, according to the charges. He is expected to make his initial appearance in federal court on April 12, 2017.
In another separate but similar case, Crystal T. Kemp is charged with 16 counts of willfully aiding and assisting in the preparation of false U.S. Individual Income Tax Returns for others. The 16 false income tax returns that Kemp prepared for others cover tax years 2012 through 2015 with false claims on the returns including false losses from sole proprietorships, false education credits, false earned income credits and false child tax credits, according to the charges. She also allegedly filed two false income tax returns for herself for tax years 2013 and 2014. The indictment alleges these tax returns falsely claimed a much lower income than Kemp actually received from her business, CQ Tax Preparation.
Chester Swanson is yet another return preparer, charged with 21 counts of willfully aiding and assisting in the preparation of false U.S. Individual Income Tax Returns for others. The 21 U.S. Individual Income Tax Returns listed in the indictment cover years 2012 through 2015. The false items allegedly included on those return include false amounts of medical expenses, false amounts of gifts to charity, false unreimbursed employee expenses, false losses from sole proprietorships, false education credits and false deductions for tuition and fees. He is set for trial Aug. 14, 2017.
Finally, Derwin Blackshear and Terranjala “Denise” Wilder Smith operated a return preparer business known as Level One Tax Service in Houston. They were indicted earlier this year on charges they prepared and filed false tax returns reporting false wages and withholding taxes for clients for tax years 2011 through 2014. A total of 25 individual returns were charged in the indictment which resulted in fraudulent refunds totaling more than $250,000. Blackshear and Wilder allegedly received a portion of the fraudulent refunds as fees for preparing and filing the fraudulent tax returns. They are set for trial Sept. 11, 2017.
Each count of aiding and assisting in the preparation of false income tax returns is up to three years in federal prison and a possible $250,000.
IRS-CI conducted all of the investigations in these matters. Assistant U.S. Attorneys Jimmy Sledge, Charles J. Escher and Justin Martin are prosecuting the cases.
An indictment or information is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.