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FOR IMMEDIATE RELEASE:

October 19, 2001

Norma Estimbo Lacy
Public Affairs Specialist
Phone: 713/567-9388
Fax: 713/718-3389
E-Mail:
usatty.txs@usdoj.gov

RETURN PREPARER PLEADS GUILTY TO AIDING THE PREPARATION OF FALSE INCOME TAX RETURNS

Albert A. Balboni, Assistant U. S. Attorney
Phone: 713/567-9726

(Houston) Gregory A. Serres, United States Attorney for the Southern District of
Texas, announced today that Charles Morgan, age 57, pled guilty to fifteen counts of aiding the filing of false and fraudulent income tax returns. Morgan admitted he prepared federal income tax returns for tax years 1995 and 1996, including the fifteen income tax returns identified in the 15-count indictment. Morgan further admitted he used false and/or inflated, non-deductible commuting expenses and other false Schedule A and Form 2106 deductions to generate large refunds for his clients. The fifteen returns charged in the indictment each contained false itemized deductions which resulted in a false statement of total itemized deductions on Schedule A of each return. For example, Mr. Morgan admitted he placed a non-existent vehicle deduction of $27,900 on the 1996 return he prepared for Jeffrey and Jennifer Murray which, along with several other false deductions, reduced the Murray's taxable income to zero and resulted in a fraudulent refund of $4,536.00. Morgan also admitted to putting similar false deductions on an additional 87 tax returns. He further admitted he charged his clients 10 % of the refund generated. Mr. Morgan admitted his actions resulted in a tax harm to the government of over $310,000.00.

Morgan faces a possible sentence of three years imprisonment, one year supervised release, and a fine of $250,000 for each count. This case was investigated by Special Agents of the Internal Revenue Service and was prosecuted by the United States Attorney's Office.

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