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    United States Attorney's Office
    Central District of California

    Thom Mrozek
    Public Affairs Officer

    (213) 894-6947
    thom.mrozek@usdoj.gov



    Return to the 2007 Press Release Index
    Release No. 07-119

    September 24, 2007

    ORANGE COUNTY TAX PREPARER SENTENCED TO PRISON FOR AIDING IN THE PREPARATION OF FALSE TAX RETURNS

    A federal judge in Santa Ana today sentenced the operator of DeAngelo Tax Service in Yorba Linda and Western Tax Service in Anaheim to 51 months in federal prison for conspiring to defraud the Internal Revenue Service and aiding and assisting in the filing of false tax returns.

    Samuel Joseph DeAngelo was sentenced this morning by United States District Judge James V. Selna.

    During the 2000 and 2001 filing seasons, DeAngelo owned and operated a tax return preparation business. During the 2000 filing season, DeAngelo operated DeAngelo Tax Service out of his residence in Yorba Linda. During the 2001 season, he operated Western Tax Service out of an office suite in Anaheim.

    DeAngelo trained each of the tax preparers who worked at his companies to make false, misleading and inaccurate statements on U.S. Individual Income Tax Returns, which are called Forms 1040. These false statements included the falsifying and inflation of charitable contributions, employee business expenses, and depreciation.

    DeAngelo Tax Service and Western Tax Service charged preparation fees that were substantially higher than the fees charged by comparable services in 2000 and 2001. The return preparers obtained the above-market fees from their clients because the clients were receiving inflated refunds from the IRS. DeAngelo paid the return preparers who worked for him a percentage of the tax return preparation fee they charged the client.

    The preparers at Western Tax Service prepared approximately 8,122 tax returns for the 2001 tax year. The IRS has determined that the tax loss attributable to the 2001 tax returns totals nearly $15.5 million.

    DeAngelo was indicted along with six others in a conspiracy to aid and assist others in the preparation of false tax returns filed with the IRS. Those individuals included Jeffrey Russell Wright, DeAngelo’s son-in-law, who assisted in the preparation of tax returns for DeAngelo Tax Service and Western Tax Service; Alan Michael Hovey, a return preparer for Western Tax Service; Heather Lee Chaffin, originally a secretary and later a return preparer for DeAngelo Tax Service and, subsequently, Western Tax Service; and Douglas Shields, a data entry clerk and then a tax return preparer for Western Tax Service.

    Douglas Shields, Wright, Hovey, and Chaffin each previously pleaded guilty to conspiring to aid and assist others in the preparation of false tax returns.

    Douglas Shields was sentenced on August 6 to 15 months in federal prison for his role in the conspiracy.

    Wright was sentenced on September 17 to six months in prison, to be followed by six months of home detention.

    Hovey is set to be sentenced on October 22.

    Chaffin’s sentencing is set for November 19.

    Additionally, the indictment charged Kelly Agbonmoba David and Anthony Todd Stefani, both of whom were found guilty at trial earlier this year on conspiracy and three charges of aiding and assisting in the filing of false tax returns. Both David and Stefani are set to be sentenced by Judge Selna on October 15.

    Two other preparers, Joe Gordon Shields and Erin Cordes, each waived indictment and entered guilty pleas to informations filed by the United States Attorney’s Office. Cordes was sentenced on September 24 to one year of probation, which is to include six months of home detention. Joe Gordon Shields is scheduled to be sentenced on October 15.

    The investigation in this case was conducted by the Los Angeles Field Office of IRS – Criminal Investigation.

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    Release No. 07-119
    Return to the 2007 Press Release Index