Simply dial the employees; work from home; mistrust; and other highlights of recent tax cases.
Corvallis, Montana: Former lawyer Ronald Dean Lords, who admitted defrauding investors and evading income tax in connection with a real estate investment scheme in which he lost more than $ 1 million, has been sentenced to three years in prison, followed by three years of supervised release.
The government alleged that Lords operated Eagles Landing Legal Services and was also a licensed real estate agent and general contractor who operated Eagles Landing Construction. The latter claimed to develop real estate and build houses.
From 2011 to 2018, Lords defrauded 14 victims by convincing them to invest in his construction business. He told victims he would use the money to build houses, make monthly interest payments, and repay the money once the houses are sold. Lords also said he would return victims’ money within 30 days of any request.
Instead of funding construction projects, Lords used some of the new money to pay interest to previous investors and lost most of it in the futures market. When some victims demanded repayment of their principal, Lords admitted that he had lost over a million dollars in the market and did not have their money.
The government further alleged that Lords failed to report $ 432,608 he received from several victims in 2015 as other income on his taxes, resulting in unpaid taxes of $ 152,734 for that that year.
Atlanta: Husband and wife Tiyari and Farah Collins pleaded guilty to defrauding the US Small Business Administration by obtaining some $ 1.9 million in fraudulent loans from the Paycheck Protection Program and Disaster Loan Programs economic.
Tiyari Collins, who owned and operated the Collins Financial Services Group tax preparation business, also pleaded guilty to filing thousands of fraudulent returns resulting in federal tax loss of at least $ 3.8 million.
He submitted claims for six fraudulent PPP loans and five fraudulent EIDL loans in mid-2020, totaling more than $ 1.9 million. Farah Collins was involved in the submission of four of these fraudulent claims and received some $ 365,000 from the fraudulently distributed PPP and EIDL funds. In the claims, the Collinses falsely represented, among other things, the company’s average monthly payroll, the number of employees working for the affected company, and the company’s revenue.
The Collinses have also submitted false statements in connection with several of these claims. Tiyari Collins paid someone else to prepare the fraudulent payroll reports that were submitted as part of the claims. For example, Tiyari Collins instructed this person to prepare a fraudulent payroll report showing total annual salaries to be some $ 850,000 for Collins Financial Services Group and to “buy out employees if necessary,” the employees said. authorities.
The Collinses owned or controlled seven entities that sought out fraudulent PPP and EIDL loans; the couple used the money for, among other things, luxuries, personal credit card bills and office furniture. After the fraud was discovered, federal agents seized some $ 588,900 of the stolen money.
Separately, Tiyari Collins, through her tax preparation business, filed and had thousands of fraudulent federal returns filed between January 2015 and around April 2020, resulting in losses of over $ 3.8 million for the IRS. It inflated customer refunds, among other things, by fraudulently claiming they qualified for certain credits and producing fraudulent Schedule Cs to reduce taxable income. Customers never gave Collins permission to include this materially false information in their federal returns.
Agents detected this fraud in part thanks to information provided by the IRS Scheme Detection Center, which identified a pattern of suspicious returns linked to Tiyari Collins and his tax preparation companies. Officers then used an undercover operation and information from a federal search warrant executed in June 2020.
Tiyari Collins pleaded guilty to one count of conspiracy to commit wire fraud and one count of aiding and assisting in preparing a false statement. Farah Collins pleaded guilty to one count of conspiracy to commit wire fraud. The penalty for both is March 15.
Cincinnati: Barry Rene Isaacs, 35, founder, owner, CEO and chairman of a nonprofit, was sentenced to four years in prison for using thousands of dollars for personal expenses instead of paying federal payroll taxes .
Hope 4 Change, a nonprofit organization that provided housing and care for adults with developmental disabilities, substance abuse issues and mental disorders, employed between 120 and 180 people in 2013 and 2014. The purpose organization nonprofit withheld FICA taxes from its employees’ paychecks, but did not pay more employment taxes to the IRS for five quarters at the end of 2013 and 2014. Isaacs did spend thousands dollars to Hope 4 Change for clothing, massages, beauty treatments, travel and personal vehicles for him and his family; he also fraudulently applied for a car loan and credit card using someone else’s social security number.
Isaacs fled after being charged in April 2019 and was arrested in Texas nine months later. He pleaded guilty last spring.
Teela Gilbert of Cincinnati, vice president of Hope 4 Change, director of “student affairs” and office manager, also pleaded guilty to wire fraud and aggravated identity theft.
Isaacs was also ordered to pay some $ 246,000 in restitution to a company from which the co-defendants induced payments for false invoices.
Clarksville, Tennessee: Restaurant owner Quanwei Shi was sentenced to 20 months in prison for conspiring to house illegal foreigners; to accommodate foreigners in an irregular situation; money laundering; tax evasion; and employment tax evasion.
Shi, majority owner of New China Buffett & Grill, and co-owner Chongqiang Chen, 30, also of Clarksville, were arrested in April 2020 after a 14-count indictment charged them in a scheme to harbor undocumented workers and defeat US tax laws Shi pleaded guilty in March.
Between 2017 and April 2019, Shi conspired to cover up and harbor illegal aliens from China and Guatemala. Workers were not required to complete forms related to their immigration status and were paid in cash. The workers lived with Shi at his residence and worked in the kitchen where they did not interact with the restaurant patrons.
Shi also underreported gross receipts in company income tax returns for the 2017 to 2019 tax years and failed to collect, account for and pay employment taxes, for an overall tax loss of $ 440,941.
The judge also ordered the confiscation of Shi’s house and two vehicles, and ordered the return of $ 417,149.
Chen pleaded guilty in July and will be sentenced on February 25.
Philadelphia Cream: Albert Upshur, aka Kelinde Jaha, was sentenced to seven years in prison for conspiring to defraud the IRS and helping others file false income tax returns.
Last summer, Upshur and conspirator Yolonda Thompson, aka Qhama Al, were each convicted of one count of conspiracy to defraud the IRS and eight counts each of aiding d other people to make false statements.
Between 2009 and 2015, the couple attempted to raise millions of dollars under a program they called the Debt Payoff Process. Thompson and Upshur formed the Yolonda Denise Thompson Living Trust. Participants were told that if they paid Upshur money and produced statements and other documents that Thompson prepared for them, they could access the funds from the Thompson Trust to pay off their mortgages and other debts.
In effect, the federal returns that Thompson prepared and that participants filed called for refunds to which participants were not entitled; the returns collectively sought fraudulent IRS refunds of more than $ 300 million.
After the IRS began investigating the debt repayment process, Upshur and Thompson attempted to obtain money from the IRS through other fraudulent means, including using checks drawn on accounts. banking closed and trying to use financial instruments such as fictitious bonds. They also continued to make false statements for themselves and others after the IRS imposed civil penalties on them and informed them that they were under a criminal investigation.
Upshur was also sentenced to serve a year of supervised release. Thompson’s sentencing is February 15.