Tax Crimes Archives - Pearlman Law

20 02, 2017

The Anti-Loophole: The “Voluntary” Tax Which is Not So Voluntary

By Allan|2020-04-06T21:22:51-04:00February 20th, 2017|IRS Collection, Tax, Tax Crimes, tax evasion|0 Comments

Once again, we are confronted with the truth the our “voluntary” tax system is not entirely voluntary after all. As Dan Ackroyd said on Saturday Night Live in the 90s, playing then-presidential contender, Bob Dole as he berated then-President, Bill Clinton, “You know it, I know it, and the American People know it.”

But, apparently, North Carolinian, Chet Lee West, didn’t know it. Or so he acted. He was convicted in District Court of three counts of tax evasion. West, acting as his own attorney at trial, stated in his closing arguments that the jurors should ‘see the truth and set me free.” The jurors did not agree with his statement and reached the guilty verdict in only 1 hour.

Owing more than $52,800 in back taxes, West, claimed he found a loophole in the tax code that freed him from having to pay income taxes. West attempted to read from a book containing federal tax codes but the judge had him stop, explaining that she would instruct the jurors what the law is.

During the trial, West admitted that he had not filed taxes since 2000 and had sent a letter to the IRS explaining that he elected to not be subject to income tax. (Now that is an election almost everyone could support – at least until one considers Supreme Court Justice Oliver Wendell Holmes’s take on this issue. Holmes famously said: “I like to pay taxes. With them I buy civilization.”) The IRS responded to West’s “election not to be subject to income tax” with a letter back to West informing him that American citizens cannot opt out of paying taxes.

Donald J. Kleine, the Federal prosecutor said that West knew he had an obligation to pay his taxes but, “just didn’t want to.”

West was sentenced to Federal prison for a term of more than 4 years and ordered to pay restitution to the Internal Revenue Service in the amount of $439,515.

3 03, 2015

Chiropractor Adjusts Tax Return, Gets 15 Months

By Allan|2020-02-12T14:20:16-05:00March 3rd, 2015|Income, State Tax, Tax Crimes, tax evasion, Tax fraud|0 Comments

Working on more than spines, a Pennsylvania chiropractor attempted a sort of tax decompression by manipulating and adjusting her tax return to file a 2006 federal income tax return that falsely claimed her taxable income was $89,754, when, in fact, she had taxable income of $1,151,928, and owed at least $363,566 in taxes for that year.

Unhappily for the chiropractor, Maria Giacalone-Hewson, 43, of Canadensis, Penn., who operated Canadensis Healthcare Inc. was sentenced to 15 months in prison for aiding the preparation and filing of a false federal income tax return and false statements relating to healthcare matters.

At her sentencing, Giacalone-Hewson was also ordered to pay $113,821 in taxes that she owed forthe years 2007 through 2010.

In addition to the prison term, Judge Mariani ordered that Giacalone-Hewson be supervised by a probation officer for three years following her release from prison.

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24 12, 2014

The Sin of Snipes, Replayed: Mayor Pleads Guilty to Failing to File Tax Return

By Allan|2020-02-12T14:20:17-05:00December 24th, 2014|failure to file tax return, Tax, Tax Crimes, Tax fraud|0 Comments

The mayor of Mount Vernon, N.Y., just north of Manhattan, has pleaded guilty to failing to file corporate and personal income tax returns. Failing to file tax returns is the same crime for which Hollywood film star Wesley Snipes famously was convicted and for which he spent nearly three years in federal prison.

Mayor Ernest D. Davis, 76, faces up to two years in prison as a result of his plea agreement.

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21 03, 2010

Portland Pastor Pleads to Pretend Receipts Pumping Up Expense Tally

By Allan|2020-02-12T14:20:18-05:00March 21st, 2010|Tax Crimes|0 Comments

A religious leader in Vancouver, Washington has a lot of atoning to do for his less-than-spiritual relationship to material things and the lure of filthy lucre.

Until last September, Maximo Garza, 47, was the pastor for Victory Outreach Church of Portland, a non-denominational church which has operated in Portland, Oregon, for more than 15 years. Garza was sentenced to five months in prison for aiding the preparation of a false tax return.

During his plea hearing, Garza admitted he provided false expense invoices which purported to reflect public relations and other services provided by Victory Outreach Church to William Thompson, who was then operating a mail-order divorce service using the name Hallwood Inc.

Thompson used the false invoices to take expense deductions on tax returns filed by Hallwood in order to fraudulently reduce his tax liability. Thompson pled guilty to tax evasion and was sentenced to a prison term in 2007.

Between 2001 and 2003, Garza provided invoices reflecting a total of $735,441 in false business expenses. Thompson agreed to let Garza keep approximately 10% of the expense amounts.

28 02, 2010

Russian Con-Artist Faked “File Free” Tax Return Websites, Stole Refunds

By Allan|2020-02-12T14:20:19-05:00February 28th, 2010|Data Security, Identity Theft, Tax Crimes, Tax Refund|0 Comments

Marketing experts say that there are few words as powerful to persuade as “free.” One enterprising scamster took that concept and ran with it to steal unsuspecting taxpayers’ tax refunds.

While living in sunny San Diego, Maxim Maltsev of Russia, blended the persuasive power of the word “free” with the fact that the IRS has a free electronic tax return filing program, and harnessed the awesome reach of the Internet, to steal tax refunds owed to ordinary taxpayers, looking to get their returns prepared and filed as quickly, easily and cheaply as possible.

Maltsev admitted in federal court in California that he was part of a conspiracy to obtain federal income tax returns requesting refunds before they were electronically filed with the IRS.

The success of the scheme depended upon taxpayers being fooled into using apparently free electronic tax return filing services which were, in fact, fake.

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20 11, 2009

Wesley Snipes’ Lawyers Argue Appeal of Tax Conviction

By Allan|2020-02-12T14:20:19-05:00November 20th, 2009|Tax Crimes, Tax Penalties|0 Comments

The Associated Press reports that oral argument on Wesley Snipes’ appeal of his conviction on three misdemeanor charges of failure to file tax returns was heard by the United States Court of Appeals for the Eleventh Circuit, in Atlanta today. See Wesley Snipes Appeals 3 Tax Convictions in Georgia. (http://sn.im/tc2fn)

27 05, 2009

Jobs Agency Owner Gets Temp Assignment (Some Call it a ‘Sentence’) to Federal Prison for Unpaid Employment Tax

By Allan|2020-02-12T14:20:20-05:00May 27th, 2009|100% Penalty, Employment Tax, IRS Collection, IRS Enforcement, IRS News, Payroll Tax, Pierce the Corporate Veil, Tax Crimes, Trust Fund Recovery Penalty, Withholding Tax|0 Comments

A San Antonio, Texas, woman was sentenced to 41 months in federal prison and ordered to pay $1.5 million in restitution to the IRS for her role in a fraudulent tax scheme.

In addition to the prison term, United States District Judge Fred Biery ordered that Terrell Diamond be placed under supervised release for a period of three years after completing her prison term.

According to court records, Diamond, along with her now-ex-husband and co-defendant, William Diamond, conspired to defraud the IRS in the assessment and collection of more than $1.5 million in employment taxes due and owing from November 1996 to June 2003.

The employment taxes owed pertained to temporary employment agencies owned and operated by the Diamonds, including Ameriforce and Primo Labor.

Both Diamonds pleaded guilty to the same charge: one count of conspiracy to defraud the IRS.

23 05, 2009

IRS Auditor Caught Faking Own Tax Return

By Allan|2020-02-12T14:20:20-05:00May 23rd, 2009|IRS Enforcement, IRS News, IRS Power, Tax Crimes|0 Comments

A revenue agent with the Internal Revenue Service has agreed to plead guilty to a federal tax fraud charge for filing a personal income tax return that claimed he suffered a loss in a real estate transaction when in fact he realized a substantial profit. (“Revenue agent” is the official title for the people at the IRS who audit tax returns.)

In a plea agreement, Jim H. Liu, 43, of Diamond Bar, Calif., agreed to plead guilty to subscribing to a false tax return — a charge that carries a penalty of up to three years in federal prison.

‘My Gain is Your Loss’ Shenanigan Uncovered and Confessed

Liu admitted he filed a false tax return for the 2002 tax year that improperly claimed a loss on his sale of a property in Pomona. Liu sold the property for a profit of more than $48,000, but he instead claimed a loss of more than $4,200.

The tax loss to the government, as a result of Liu’s filing, was approximately $14,642.88.

10 05, 2009

Dentist’s Pyramid of Unpaid Payroll Taxes and Unfiled Returns Bring Indictment

By Allan|2020-02-12T14:20:20-05:00May 10th, 2009|100% Penalty, IRS Enforcement, IRS News, IRS Power, Payroll Tax, Tax Crimes, Trust Fund Recovery Penalty, Withholding Tax|2 Comments

If dentist Arlan R. Turley treated his teeth the way the Government alleges he’s treated his tax-filing obligations, he’d have cavities and one heck of a case of bloody, bad gums.

This 60-year-old Arizona man was indicted on two counts of willful failure to file a tax return and 20 counts of willful failure to pay over taxes. Turley operated the East Valley Dental Service in Mesa, Ariz.

The indictment alleges that the charges for failure to file are the result of Turley’s non-filing of his 2002 and 2003 income tax returns. In addition, Turley has not filed an individual tax return for a whole decade: 1997 to 2007.

The charges for failure to pay over taxes arise from Turley allegedly not turning over his employees’ payroll taxes to the government, again and again. (See https://pearlmanlaw.wpengine.com/not-just-for-bernie-madoff-or-king-tut-business-owners-build-devastating-pyramids-of-withholding-tax-debt-deducted-from-paychecks-but-not-sent-to-irs/ .)

If convicted, Turley faces up to five years in prison and a fine of up to $250,000.

15 03, 2009

Ma-and-Pa Ponzi Schemers Sentenced for Medical Research Tax Scam and $10M Ponzi Scheme

By Allan|2020-02-12T14:20:21-05:00March 15th, 2009|Ponzi Scheme, Tax Crimes, Uncategorized|1 Comment

In the wake of master swindler and former NASDAQ chairman, Bernard Madoff’s $65-billion dollar, multi-decade, worldwide Ponzi scheme, it might seem like scams are popping up everywhere one looks..

In this context, in January, 2009, a U.S. Justice Department announcement reports that Ponzi-schemer-or-collaborator Shirley G. Graybill, 72, of North Haven, Conn., was sentenced to two years of probation — the first four months of which she must spend in home confinement. She had pleaded guilty in June, 2005 to one count of making and subscribing to a false 2002 tax return.

What happened between the June 2005 guilty plea and the three-and-a-half-year later sentencing announcement?

According to court records, the Triple Diamond Foundation was an entity created by Graybill and her husband, Dale L. Graybill, purportedly to fund cancer research, but which did not have tax-exempt status from the IRS. The Graybills controlled the Triple Diamond Foundation and its bank account. And apparently, they were quite adept at using that bank account. (more…)