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December 28, 2012

A guide if you are a victim of tax refund, or tax return fraud

Filed under: California Defense Attorney — Tags: , — fayarfa @ 7:28 pm

Tax return fraud is becoming a bigger and bigger problem every year. Most people panic when they find out they are a victim, and for a good reason.

Many times people discover they are a victim when they receive a bill from the IRS for a few thousand dollars, or cannot understand what they are being asked to provide during an audit. It is important to keep good records of your taxes and write down all information. Whenever you talk to an IRS agent, it can be very helpful to write down their name, ID, and location. This way you are able to reference that call in the future. Also keep in mind that there are many people who would prefer to blame their taxes on fraud instead of paying what is due. This is unfortunate but is the main reason that the IRS is not going to be welcoming the thought of fraud immediately. You will have to provide proof along the way.

It is critically important to get a transcript, and review all details on your record before agreeing to pay the IRS (if you have reason to believe that they are mistaken, or someone has illegally filed taxes using your personal information). A transcript will show a summary of your tax return along with any actions taken, expenses written, payments, amended returns, and corrections because of math mistakes.

Here are a few examples of what your transcripts will look like:

When you are sure your refund was fraudulent do the following:

Contact the IRS exam unit at 1.866.897.0161. Be sure to get a fax number or address in order to submit all of the necessary paperwork. If you have previously spoken with an IRS agent and they have suggested that you are a victim of identity theft, reference the date and time of that original call. If you have a reference number, contact name, and location of where the original call was routed that can also be a help.

Print out a FORM 14039 which is the Identity Theft Affidavit. We have a copy here, or you can go to the IRS website and locate it. This form is very important and will switch your account status from being audited or non paid, to an identity theft case. Usually when your account is being audited, there will be specific things you need to make happen in a timely manner. Once you submit the FORM 14039, your putting everything back into the IRS’ court.

File a police report. You will need the report number from your local police department.

Call the following hotlines and let them know you are a victim of tax fraud.

Federal Trade Commission: 1.877.438.4338. or visit FTC.gov

Social Security Administration: 1.800.772.1213 or visit SSA.gov

Equifax (You need to contact one credit bureau and they will notify the others: 1.800.525.6285 or visit Equifax.com

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December 21, 2012

ATTORNEY, ACCOUNTANT, AND TWO ADMINISTRATORS SENTENCED TO PRISON FOR REVENUE AND TAX CHARGES IN $154 MILLION MEDICAL INSURANCE FRAUD SCHEME

Filed under: California Defense Attorney — Tags: , , , — fayarfa @ 4:25 pm

* Additional felony fraud counts for the defendants will be tried at a later date

SANTA ANA - An attorney, accountant, and two administrators were sentenced today for violating revenue and tax codes for their roles in the largest medical fraud prosecution in the nation for recruiting over thousands of healthy patients to undergo unnecessary and dangerous surgeries to fraudulently bill medical insurance companies. This trial involved the failure to file tax returns and under-reporting income to state tax authorities. The court bifurcated the case due to its size and volume and additional fraud charges remain pending a pre-trial hearing for those counts is scheduled for Jan. 3, 2013, at 1:30 p.m. in Department C-41, Central Justice Center, Santa Ana.

Roy Chester Dickson, 64, Yorba Linda, Unity’s attorney, was sentenced to two years and eight months in state prison and $41,629 restitution. He was found guilty by a jury Nov. 26, 2012, of two felony counts of filing a false personal tax return and faces a maximum sentence of three years and eight months in state prison for these counts. Dickson faces 101 additional felony counts which include two counts of conspiracy, eight counts of capping or paying for referrals, 30 counts of grand theft, 30 counts of insurance fraud, 30 counts of making false and fraudulent claims, one count of money laundering, and white collar sentencing enhancements for taking over $2.5 million on the fraud counts.

Andrew Robert Harnen, 58, Rosemead, Unity’s accountant, was sentenced to five years and four months in state prison and $904,780 restitution. He was found guilty by a jury Nov. 26, 2012, of three felony counts of filing a false tax return and six counts of failing to file tax returns. He faces a maximum sentence of eight years and four months in state prison for these counts. Harnen faces 101 additional felony counts which include two counts of conspiracy, eight counts of capping or paying for referrals, 30 counts of grand theft, 30 counts of insurance fraud, 30 counts of making false and fraudulent claims, one count of filing a false tax return, and white collar sentencing enhancements for taking over $2.5 million on the fraud counts.

Dee Francis, 63, a Unity administrator, was sentenced to six years in state prison and $905,507 restitution. She was found guilty by a jury Nov. 26, 2012, of one felony count of filing a false tax return and six counts of failing to file tax returns. He faces a maximum sentence of seven years in state prison for these counts. Francis faces 102 additional felony counts which include two counts of conspiracy, eight counts of capping or paying for referrals, 30 counts of grand theft, 30 counts of insurance fraud, 30 counts of making false and fraudulent claims, one count of filing a false tax return, two counts of failing to file tax returns, and white collar sentencing enhancements for taking over $2.5 million on the fraud counts.

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October 26, 2012

U.S. Customs Officer Arrested on Federal Bribery Charges Related to Scheme to Avoid Import Taxes on Goods Coming from China

Filed under: Los Angeles Criminal attorney — Tags: , — fayarfa @ 2:03 pm

LOS ANGELES – Federal authorities early this morning arrested a U.S. Customs and Border Protection (CBP) supervisory officer on charges of accepting bribes to allow others, including his ex-wife, to smuggle goods into the United States so they could avoid paying duties and taxes.

Sam Herbert Allen, 51, of Diamond Bar, was arrested after being indicted yesterday by a federal grand jury on charges of conspiracy, bribery and making false statements to investigating agents with the Department of Homeland Security.

According to the five-count indictment, Allen served as a supervisory officer assigned to oversee the examination and release of cargo entering the United States. After he was transferred to other duties within CBP, Allen convinced his ex-wife to operate an importing business that would avoid paying duties on shipments coming from the People’s Republic of China. The importing business – technically a “foreign trade zone” – would falsely claim that the shipments from China were not imported, but were instead immediately sent to Mexico. The indictment alleges that Allen promised to make the shipments appear to CBP as if they had been exported to Mexico, this in exchange for bribe payments of $2,000 per shipment.

During the course the scheme, which operated from at least September 2009 until March 2010, Allen allegedly received more than $100,000 in bribe payments.
The indictment alleges that the scheme caused the United States to suffer a loss of at least $781,632.59 in unpaid customs duties and taxes.

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August 22, 2012

Florida Man Convicted of Selling Stolen Art, Evading Taxes on More Than $1.4 Million in Income, and Structuring Financial Transactions

Filed under: California Defense Attorney — Tags: , — fayarfa @ 6:16 pm

LOS ANGELES – A Florida man was convicted today on federal charges of selling and possessing paintings stolen from a Los Angeles art gallery, tax evasion on more than $1.4 million in income, and structuring financial transactions of $226,000 to avoid federal reporting requirements while released on bond.

Matthew Taylor, 44, of Vero Beach, Florida, was found guilty by a federal jury after a trial lasting two weeks and one day. The jury convicted Taylor of wire fraud, possession of stolen property that had been transported across state lines, tax evasion, and structuring financial transactions while on pretrial release.

The jury determined that Taylor sold a stolen Granville Redmond painting from a gallery in Los Angeles to a different gallery for $85,000, falsely claiming that his mother had owned it since the 1990s.  The jury also found that Taylor knowingly possessed a Lucien Frank painting stolen from the same gallery in Los Angeles, after that painting had been taken across state lines.  The evidence at trial showed that Taylor tried to pass the Lucien Frank painting off as by another artist, and sell it, by erasing or obliterating Lucien Frank’s signature.

Taylor was also convicted of evading federal income taxes that he owed on more than $1.4 million earned in income in 2005 and 2006.  The evidence at trial showed that Taylor had not filed income tax returns for those two years and had taken elaborate steps to evade paying the taxes that he owed, including by creating or having others create corporations with names such as Microsoft Holdings, AIG Investments, and ING Investments.

Taylor was also convicted of structuring cash transactions totaling $226,000 in December 2011 in order to avoid federal reporting requirements, while he was released on bond in this case. Taylor was remanded into custody before trial.

Taylor is scheduled to be sentenced on November 8, 2012 by United States District Judge John Kronstradt.

The wire fraud and possession of stolen property charges each carry a statutory maximum sentence of 20 years in federal prison, the tax evasion charges each carry a statutory maximum of 5 years in federal prison, and the structuring charge carries a statutory maximum of 10 years in federal prison because the crime was committed while Taylor was released on bond. Therefore, Taylor faces a maximum possible sentence of 55 years in federal prison.

August 21, 2012

RESIDENTS OF CALIFORNIA AND UTAH SENTENCED FOR TAX FRAUD

Filed under: California Defense Attorney — Tags: — fayarfa @ 12:22 pm

WASHINGTON – David L. Johnson and Michael L. Putnam were sentenced today following their convictions for tax crimes related to their involvement in the Genesis Fund, the Justice Department and Internal Revenue Service (IRS) announced. Both Johnson and Putnam had previously pleaded guilty before U.S. District Judge Dale S. Fischer in the Central District of California. According to the original indictment filed in this case, the Genesis Fund was a private investment fund that was marketed as investing in foreign currency trading, but that operated as a Ponzi scheme.

Johnson, 73, of Loma Linda, Calif., was sentenced to 30 months in prison for filing two false tax returns in which he failed to disclose his bank account in Costa Rica to the IRS. According to the plea agreement, Johnson used this bank account to conceal Genesis Fund distributions from the IRS. Judge Fischer also ordered Johnson to pay restitution of $2.3 million: approximately $1.9 million to investors in the Genesis Fund and $400,000 to the IRS.

Putnam, 68, of St. George, Utah, formerly of Huntington Beach, Calif., was sentenced to 12 months and a day in prison for conspiracy and tax fraud and ordered to pay over $13 million in restitution: approximately $10 million to investors in the Genesis Fund and $3 million to the IRS. According to court documents, Putnam had cooperated with the government in the prosecution of other defendants charged for their involvement in the Genesis Fund.

According to court documents, Johnson and Putnam received significant distributions that they hid in foreign bank accounts and did not report to the IRS. Johnson received over $2.4 million while Putnam received over $1.5 million.

Johnson and Putnam are the 10th and 11th defendants to be sentenced for crimes related to the promotion of the Genesis Fund.

August 17, 2012

RESIDENTS OF CALIFORNIA AND UTAH SENTENCED FOR TAX FRAUD

Filed under: Federal Crimes Defense Attorney — Tags: — fayarfa @ 4:38 pm

WASHINGTON – David L. Johnson and Michael L. Putnam were sentenced today following their convictions for tax crimes related to their involvement in the Genesis Fund, the Justice Department and Internal Revenue Service (IRS) announced. Both Johnson and Putnam had previously pleaded guilty before U.S. District Judge Dale S. Fischer in the Central District of California. According to the original indictment filed in this case, the Genesis Fund was a private investment fund that was marketed as investing in foreign currency trading, but that operated as a Ponzi scheme.

Johnson, 73, of Loma Linda, Calif., was sentenced to 30 months in prison for filing two false tax returns in which he failed to disclose his bank account in Costa Rica to the IRS. According to the plea agreement, Johnson used this bank account to conceal Genesis Fund distributions from the IRS. Judge Fischer also ordered Johnson to pay restitution of $2.3 million: approximately $1.9 million to investors in the Genesis Fund and $400,000 to the IRS.

Putnam, 68, of St. George, Utah, formerly of Huntington Beach, Calif., was sentenced to 12 months and a day in prison for conspiracy and tax fraud and ordered to pay over $13 million in restitution: approximately $10 million to investors in the Genesis Fund and $3 million to the IRS. According to court documents, Putnam had cooperated with the government in the prosecution of other defendants charged for their involvement in the Genesis Fund.

According to court documents, Johnson and Putnam received significant distributions that they hid in foreign bank accounts and did not report to the IRS. Johnson received over $2.4 million while Putnam received over $1.5 million.

Johnson and Putnam are the 10th and 11th defendants to be sentenced for crimes related to the promotion of the Genesis Fund.

February 28, 2012

ROOFING CONTRACTOR SENTENCED FOR INSURANCE FRAUD AND FAILING TO PAY TAXES

Filed under: California Defense Attorney — Tags: , — fayarfa @ 4:05 am

*Fraud discovered after worker fell from roof and was denied workers’ compensation insurance

SANTA ANA - A roofing contractor was sentenced Friday to one year in jail and was ordered to pay $510,000 in restitution for failing to provide workers’ compensation insurance for an injured employee and failing to pay insurance premiums for unclaimed employees, who were paid in cash. Michael Amzie Holley, 43, Murrieta, pleaded guilty to a court offer Feb. 26, 2010, to two felony counts of perjury by declaration, two felony counts of recording false and forged instruments, one felony count of misrepresenting facts to the State Compensation Insurance Fund (SCIF), seven felony counts of making a fraudulent statement, one felony count of presenting a fraudulent material statement to obtain compensation, one felony count of making a false statement to discourage an injured worker from claiming benefits, one felony count of willfully failing to pay taxes, one felony count of failing to file a return with the intent to evade taxes, and a sentencing enhancement for aggravated white collar crime over $500,000.

At the time of the crime, Holley was a roofing contractor and owner of So Cal Roofing. The defendant purchased a minimum workers’ compensation policy from SCIF and failed to state that he employed subcontractors, paid workers in cash, hired unlicensed employees, and leased employees from other companies. Holley paid his employees in cash to hide the fact that So Cal Roofing had workers. He received insurance based on his false declaration and entered into a contract requiring SCIF to cover all workers employed by Holley, even those employees unknown to the insurance company. Holley submitted inaccurate payroll reports to SCIF, resulting in underpayment of insurance premiums. To hide the fraud, Holley failed to file an accurate tax return to avoid paying taxes to the State on the cash payments made to his employees.

On March 18, 2003, one of Holley’s employees was injured when he fell off a roof, and subsequently filed a worker’s compensation insurance claim. Holley denied that the injured employee worked for him, thus denying the injured employee his workers’ compensation insurance benefits. On Feb. 24, 2004, and March 2, 2005, Holley fraudulently signed under penalty of perjury that he had no employees at So Cal Roofing and filed these documents with the California State Contractor’s Licensing Board to make him exempt from securing worker’s compensation insurance.

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February 9, 2012

Californian Sentenced to Five Years in Prison for Evading More Than $150,000 in Taxes

Filed under: California Defense Attorney — Tags: , , — fayarfa @ 4:37 am

William H. Nurick, of Camarillo, Cal., was sentenced to 60 months in prison and ordered to pay $286,443 in restitution by U.S. District Judge Dale S. Fischer in Los Angeles, the Justice Department and Internal Revenue Service (IRS) announced today. On September 14, 2011, Nurick was convicted of evading the payment of more than $150,000 in taxes following a five-day jury trial.

Nurick’s conviction arises from his involvement with the Genesis Fund. According to evidence presented at trial and summarized in the government’s sentencing memorandum, the Genesis Fund was an investment fund that operated from approximately 1994 through 2002.   Genesis Fund literature described foreign currency trading as the principal activity of the fund.   The evidence at trial proved that Nurick received approximately $1.1 million in distributions from the Genesis Fund between 1995 and 2002. During this time, he used eight different entities to conceal his control over bank accounts, vehicles, and real property.

The evidence at trial further demonstrated that in May 2000, Nurick filed an amended 1995 individual income tax return admitting he owed $106,542 related to his investment in the Genesis Fund. Thereafter, Nurick deliberately and systematically attempted to conceal assets between May 2000 and April 2001 in order to evade payment of the balance owed to the IRS for his 1995 income taxes. Following a notice of balance due from the IRS, Nurick transferred approximately $133,000 from an offshore bank account that he controlled to a witness’s offshore bank account. Nurick also submitted a false “Offer in Compromise” to the IRS, offering to pay less than one tenth of his outstanding debt. Nurick’s Offer in Compromise, signed under penalties of perjury, falsely understated his net worth and income, and failed to indicate a bank account in Costa Rica with a balance in excess of $200,000, which consisted primarily of distributions he had received from the Genesis Fund. Nurick also falsely claimed on this document that he would receive no further distributions from the Genesis Fund, when in fact, he received over $350,000 from it through distributions to multiple entities that he controlled.

Of the nine defendants originally charged in this case, eight defendants pleaded guilty to charges including tax fraud, obstruction of justice, and securities violations. Judge Fischer sentenced many of the defendants to significant prison terms and ordered restitution payments totaling millions of dollars. The last of the eight guilty pleas was entered in court on December 12, 2011, by defendant Marlyn D. Hinders. Hinders was a fugitive until June 2011 when he was deported from Mexico and arrested by the United States Marshal’s Service. After a detention hearing in July 2011, Judge Fischer ordered Hinders held without bond pending trial. Hinders, formerly a resident of Colorado, pleaded guilty to tax fraud and is scheduled to be sentenced on April 2, 2012.

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January 3, 2012

Orange County Man Falsely Claimed to Have Billions of Dollars of Tax Credits to Sell

Filed under: Federal Crimes Defense Attorney — Tags: , , — fayarfa @ 2:33 am

California Federal Court Blocks Bogus Tax Credit Scheme

A federal court in Los Angeles has permanently barred Lamar Ellis of Brea, Calif., from promoting a scheme involving sales of bogus federal tax credits, the Justice Department announced today.   According to the government’s complaint , Ellis fraudulently claimed to have billions of dollars in federal research tax credits that the United States supposedly granted him for purported scientific breakthroughs.

The suit alleged that Ellis advertised the sale of these bogus credits on the Internet and issued phony documents to people purporting to give them credits that could reduce their tax obligations.   The government also alleged that Ellis partnered with the Southwest Louisiana Business Development Center, a nonprofit organization in Jennings, La., to try to sell $24 billion of the fictitious credits.

The civil injunction order entered against Ellis bars him from telling prospective customers that he can transfer tax credits to them.  He is also required to give the government a list of the names, addresses and social security or tax identification numbers of everyone to whom he purported to distribute tax credits.

December 25, 2011

MARRIED COUPLE CONVICTED OF FAILING TO PAY TAXES ON OVER $180 MILLION IN UNREPORTED INCOME FROM POWER PLANT REFURBISHING BUSINESS

Filed under: California Defense Attorney — Tags: , , — fayarfa @ 10:51 pm

SANTA ANA - A formerly married couple was convicted Friday of failing to pay taxes on over $180 million in unreported income from their power plant refurbishing business. Richard Engel pleaded guilty Dec. 16, 2011, to four felony counts of failing to file tax returns for his corporation, three felony counts of filing false personal tax returns, and one felony count of failing to file a personal return.  The defendant also admitted sentencing enhancements for fraud in excess of $500,000 causing a loss in excess of $1 million.  Richard Engel faces a sentence up to 12 years and eight months in state prison at his sentencing Aug. 3, 2012, in Department C-40, Central Justice Center, Santa Ana.

Richard Engel’s then-wife Jolene Engel pleaded guilty Dec. 16, 2011, to one felony count of failure to file tax returns for her corporation and one felony count of failing to provide material information in a tax return.  She faces a sentence up to five years and eight months at her sentencing Aug. 3, 2012 , in Department C-40.

Both defendants are required to pay the California Franchise Tax Board (FTB) approximately $1.2 million prior to sentencing.  They will also be required to pay over an additional $2 million in restitution as a term of their sentences.

Facts of the Case
Beginning in 1998, the defendants operated Powerplant Maintenance Specialists, Inc. (PMSI), a business that specialized in contracting for the refurbishment of power facilities. Jolene Engel acted as president of PMSI until June 30, 2001, when Richard Engel took over that role.  Richard Engel was also Chief Financial Officer (CFO) of the company, negotiated all contracts, handled company operations, and directed PMSI’s financial affairs.

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