Tax Fraud Blotter: Dangerous Inclinations

Uniform legal code; roughly; color them broken; and other highlights of recent tax cases.

Alexandria, Virginia: CPA Endalachew Asfaw pleaded guilty to assisting in filing a false tax return and causing a loss of at least $ 250,000 to the Internal Revenue Service.

Asfaw has operated Endalk and Yohannes Associated LP with a business partner in the District of Columbia since 2011. From 2016 to 2019, Asfaw and its business partner prepared around 10,000 returns.

Asfaw created false income tax returns for customers for 2015-2017 by overestimating employee non-reimbursed operating expenses, including for uniforms and non-reimbursed mileage expenses. He also admitted creating fraudulent Schedule C expenses and deducting undeserved exemptions.

The sentencing is on November 17th. The charges include a maximum of three years in prison and potential fines. Asfaw has agreed to issue a refund to the US

St. Louis: Attorney Nicholas Franke was sentenced to two years’ imprisonment, followed by a two-year supervised release, after pleading guilty to tax evasion on a case.

Franke ran a solo law firm that generated business income. He paid for himself from this income and submitted an extension request for 2013 to 2015, in which he stated that no taxes were due or owed. Franke knew that these statements were wrong and then made no statements for these years. He didn’t pay more than $ 300,000 in taxes.

Meridian, Idaho: Resident Scott Koritansky was sentenced to 18 months in prison for tax evasion.

From 2004 to 2010, Koritansky, who previously pleaded guilty, had a combined income of over $ 500,000, but did not pay any taxes in those years. After IRS investigators notified Koritansky that he owed taxes for those years, he took numerous steps to hide his income and evade his tax obligations.

Koritansky never had his own bank account, but instead deposited his business income into the accounts of others, instructing them to make purchases on his behalf and to use funds in those third party’s bank accounts to settle his personal expenses.

He was also ordered to serve three years of supervised release and pay $ 356,676 to the IRS after incarceration.

Fairport, New York: Resident Michael Bartusek has been sentenced to two years in prison for wire transfer fraud, money laundering and filing a false declaration.

He admitted that from the summer of 2015 to the end of 2016, he cheated on his employer of around $ 776,000, which he then invested in a high-risk program to buy and sell diamonds from overseas, hoping, personally, of their sale to profit and return the money he stole from his employer before his scam was exposed. The diamond investment failed and the money was lost.

Bartusek also admitted that as part of his diamond program, he and two others solicited investments for a company called Integra Diamonds by making fake representations in order to reclaim lost mutual funds, including the money Bartusek stole from his employer.

Bartusek also filed false tax returns for the 2015 tax year and underestimated his total income for that tax year by around $ 123,000; He also underestimated his total income for the 2016 tax year by roughly $ 46,000.

He was also sentenced to a three-year prison term with supervised release starting after his sentence and paying his victims $ 973,922 in compensation.

Miami: Milagros Espinal, the area’s tax advisor, has been arrested for violating an injunction that prevented her from preparing, filing, or assisting in preparing or filing federal tax returns for others.

The US filed a lawsuit against Espinal in 2011 alleging it had prepared statements for customers claiming deductions for fraudulent medical expenses, charitable donations, and unreimbursed business expenses made by employees. The IRS review of returns that it created found errors in 97% of the returns examined. At the same time, the parties submitted a consent resolution in which Espinal consented to a complete block when preparing the tax return. On February 16, 2011, the court issued an injunction.

On December 29, the United States filed for evidence, requested an evidence hearing, alleging that Espinal was violating. According to the petition, Espinal testified during a testimony in an independent civil suit that her occupation was “income tax, taxation”. The motion alleged that a subsequent Justice Department investigation revealed that Espinal had continued to prepare fraudulent returns, that she had never stopped and continued to act as a “ghost” preparer. The court granted this request.

The court found that Espinal had continued to issue statements despite the injunction and that the statements filed in violation of the injunction contained numerous fraudulent claims. Specifically, the order concludes that Espinal has frequently issued fuel tax credits and applied more than $ 269,095 in fabricated or overestimated deductions on returns.

The court will sanction Espinal at a later date.

Garden Grove, Calif .: Business owner Young Hoon Om, 63, of Seal Beach, Calif., Pleaded guilty to filing false declarations that resulted in a loss of nearly $ 400,000 to the US Treasury Department.

From at least 2016 through 2019, Om, the owner of Major Painting Co., a painting services company, used a nearby check cashing facility to cash over $ 1.6 million in checks received from its clients.

Over the same period, Om did not disclose all of the income he earned on his individual income tax returns and only reported $ 972,150 in gross income made from his business. For example, in 2020 Om reported total income of $ 281,135 on his individual federal income tax return for 2019 when he knew he had made approximately $ 617,540 in additional income.

He admitted that he undercut his income by tens of thousands of dollars for each of the 2016 through 2019 tax years.

Chicago: A federal court has permanently banned tax advisor Lennette Roberts and her company Real Counseling Solution Inc., which operated under the name RR Tax and Accounting, from preparing tax returns for others and from owning or operating a tax preparation business in the future.

The civil action in the case alleged that Roberts prepared fraudulent federal income tax returns. According to the complaint, the defendants made statements making false and fraudulent allegations, including false individual proofs; invented losses for non-existent companies; incorrect or excessive income tax credits; and incorrect information about the registration status of the head of household.

Roberts and her company agreed to pass the restraining order, which will allow the U.S. to conduct a full post-ruling investigation to monitor compliance. The order requires Roberts to send the restraining order to anyone for whom he and her company have prepared federal returns, other tax forms, or refund requests after January 1, 2018. Roberts must also post an electronic copy of the injunction on any company social media profile that is currently being maintained or created for the next five years.

Lilburn, Georgia: A federal jury found Marquet Antwain Burgess Mattox guilty of filing fraudulent returns of nearly $ 165 million on behalf of several counterfeit trusts.

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

The IRS paid approximately $ 5 million of the refunds Mattox used to purchase a home, expensive furniture, and a luxury car.

Mattox (aka Marquet Antwain Burgess Mattox El, Marquet Burgess Mattox, Asim Ashunta El, and Asim El Bey) has been found guilty of nine wire transfer fraud cases, ten false allegations against the US government, and theft of government funds. He faces a maximum of 20 years’ imprisonment for fraud, five years for making false claims, and 10 years for stealing government funds. He is also facing a period of supervised release, restitution, fines and forfeiture.