Tax Fraud Blotter: Obvious red flags

Sister act; a day to think about it; cheat wagons; and other highlights of recent tax cases.

Orlando, Florida: Petra Gomez, who pleaded guilty in November, has been sentenced to eight years in prison for conspiracy to commit government fraud and tax evasion. Her sister Jakeline Lumucso previously pleaded guilty to conspiracy to defraud the government and was sentenced to four years in prison.

From January 2012 to June 2016, Gomez and Lumucso filed more than 16,000 federal false declarations that resulted in fraudulent refunds totaling nearly $ 25 million. The sisters founded five different tax preparation companies and, in some cases, opened the companies on behalf of others to cover up the fraud.

When she submitted her return in 2014, Gomez also gave no more than $ 800,000 in income; She claimed $ 213,434 in earnings when she actually made $ 1,110,508.

The court also ordered Gomez and Lumucso to pay $ 24,940,495 in compensation to the IRS. Gomez was asked to pay the IRS an additional $ 510,999 for tax evasion.

Hollidaysburg, Pennsylvania: Anthony DiBona, 58, was sentenced to one day in prison and two years of supervised release with six months of house arrest with electronic surveillance for conviction of converting government funds and making false statements.

In April 2013, DiBona received $ 57,242 in grants from the Federal Emergency Management Agency and mistakenly converted them for his own use. When filing his tax returns for the 2013-2015 tax years, he left out all grant income from his 1040s.

After the IRS found that DiBona had received unreported income from the grant, it was advised that the grant income was taxable. DiBona, through a tax advisor, filed a first set of amended tax returns for the tax years in question and added the grant income. But in July 2018, he went to a different creator and filed a second set of amended statements that removed the grant income. DiBona has also submitted an original declaration for the 2017 tax year and omitted its grant income.

This resulted in a total tax loss of $ 19,809.

He was sentenced to pay $ 25,264.07 to the IRS and $ 57,242 to FEMA, among others.

New York: Ambulance operator Steven J. Kwestel pleaded guilty to failure to pay wage tax.

He ran Courtesy Transportation Inc., a Brooklyn company providing ambulance services. From 2013 to 2019, he withheld payroll taxes from his employees’ paychecks but did not pay $ 1,302,841 in tax to the IRS.

The verdict will be given on October 20th. He faces a maximum of five years in prison, as well as supervised release, reparation and fines. He has agreed to repay more than $ 1.2 million.

Palm Beach, Florida: A federal court permanently banned four tax advisors from filing federal income tax returns and from owning or conducting tax filing business for others.

In issuing an injunction against Marcus Alty, Jeanait Mathurin, Prestige Tax Services Inc. (dba Just Tax Services) and Excellent Tax Services, the court found that the defendants had made statements making false or fraudulent claims on American Opportunity Tax Credit and Earned Income were tax credits, often based on fabricated business income and expenses. The order also states that the defendants made statements incorrectly listing fuel tax credits and false educational expenses.

The lawsuit against the defendants alleged that their fraudulent activities caused the Treasury Department to lose more than $ 5 million.

New York: The Bank of NT Butterfield & Son Ltd. has agreed to pay US $ 5.6 million to assist US taxpayer clients in opening and maintaining undeclared overseas bank accounts from 2001 to 2013.

The deal was based on Butterfield’s “extraordinary collaboration,” the authorities said, including its efforts to provide files to non-compliant US taxpayer customers, and provides that Butterfield will not be prosecuted.

Butterfield is required to cede $ 4.896 million to the United States, which is certain fees it has earned by helping its clients open and maintain these undeclared accounts, and is required to pay $ 704,000 in reimbursement to the IRS, the approximate unpaid taxes resulting from the tax evasion of Butterfield’s customers.

Butterfield admitted that it knew, or should have known, that certain taxpayers were using their accounts to evade their U.S. tax obligations, and admitted that it has helped certain customers get their beneficial ownership of undeclared assets in overseas bank accounts be led to hide from the IRS. Tactics included maintaining undeclared accounts for customers held by bogus companies; and opening accounts and making it easier for US customers to transfer funds despite obvious warning signs that customers were using the accounts to maintain undeclared assets or to commit tax evasion.

In 2013 Butterfield took remedial action to stop helping taxpayers evade federal income taxes. Butterfield’s collaboration included efforts to facilitate the creation of approximately 386 customer files for non-compliant taxpayers.

Boise, Idaho: Texas tax advisor Bushambale Kashunga has completed a settlement of an investigation into alleged violations of Idaho consumer law.

The Idaho Attorney General began investigating Kashunga’s practices after the state examined the returns of 106 people who used Wichita Falls, Texas’ Kashunga as their preparer. The state tax commission found grossly inflated deductions and expenses for Kashunga’s customers, who were all members of the Idaho refugee community.

Kashunga denies the allegations.

Under the settlement, Kashunga is prevented from preparing to return to Idaho. He paid $ 51,640 to reimburse Idaho customers who had tax debts as a result of his preparation. He also agreed to reimburse Idaho AG for $ 5,000 for investigation costs.

Washington, DC: Devell Lincoln, 55, has been convicted of conspiracy to steal public funds, theft of public funds, and aggravated identity theft.

From 2011 to 2013, Lincoln conspired with Stephanie Twyman and others to cash tax refund checks fraudulently received by filing false federal income tax returns on behalf of others. In total, the conspirators collected more than $ 500,000 in fraudulent refunds on a check cashing business, and Lincoln deposited more than $ 150,000 in fraudulent refunds through bank accounts he controlled.

While two of these accounts were in Lincoln’s name, one bank account was in the name of a deceased third party and one in the name of a company registered in the name of the deceased.

Lincoln faces at least two years in prison for aggravated identity theft, five years for conspiracy, and 10 years for theft of public funds. He is also facing a period of supervised release, return, decay and fines.

Harrington, Delaware: Corporate Secretary Sara Collins pleaded guilty to willful failure to pay wage tax on behalf of a local company.

Collins served as the corporate secretary of a plumbing, heating and air conditioning company for more than 20 years. From the first quarter of 2013 through the last quarter of 2019, she failed to file quarterly federal forms and paid less than $ 37,000 in wage tax over those six years.

In total, Collins was unable to pay the IRS more than $ 930,000.

She pleaded guilty to willful failure to pay taxes in five cases and faces a maximum of five years’ imprisonment in each case. Judgment is on November 17th.