TAX PREPARER SENTENCED TO SIX YEARS IN FEDERAL PRISON
David B. Fein, United States Attorney for the District of Connecticut, announced that THOMAS THORNDIKE, 62, a Woodbury-based tax preparer, was sentenced today by Chief United States District Judge Alvin W. Thompson in Hartford to 72 months of imprisonment, followed by one year of supervised release, for engaging in tax fraud over the course of several years.
According to court documents and statements made in court, THORNDIKE was the founder and owner of Cornerstone Financial Services of Woodbury, LLC (“CFS”), a tax preparation and financial services business. As the owner of CFS, THORNDIKE prepared federal tax returns for individuals and businesses in exchange for payment of a fee. In the course of preparing many of his clients’ tax returns, THORNDIKE improperly reduced the amount of tax due in a variety of ways, including falsely claiming deductions for charitable contributions, and falsely claiming deductions for job expenses.
THORNDIKE also offered clients an opportunity to purchase audit insurance. Purchasers of audit insurance could elect to be represented by THORNDIKE in connection with any Internal Revenue Service audit of their individual federal income tax returns. If clients were audited by the IRS, THORNDIKE would provide them with blank Goodwill receipts as well as instructions as to how they should create a list of charitable donations that would correspond with the donation value THORNDIKE had entered on their returns. He also would direct his clients to create mileage logs that would support deductions he had entered for employment-related travel.
In addition, THORNDIKE prepared tax returns for his two sons that improperly identified cash payments from him to his children as wages. He also claimed hundreds of thousands of dollars in improper business deductions, including, but not limited to, wage expenses for his children, which actually were personal payments to them; more than $8,000 in personal carpentry work; and a $27,983 “sale of business property” loss stemming from THORNDIKE’s selling of an engagement ring after his marriage engagement had broken off.
In December 2008, the IRS notified THORNDIKE that he was the subject of an IRS audit examining his preparation of tax returns for the tax years 2006 and 2007. In connection with the audit, THORNDIKE assisted in the preparation of, and then submitted to the IRS, falsified documents to support the false deductions claimed on tax returns that were subject to the audit.
The IRS has estimated that THORNDIKE’s clients received in excess of $1 million in tax refunds to which they were not entitled.
Judge Thompson ordered THORNDIKE to pay $64,026.69 in back taxes, penalties and interest for tax losses related to his own fraudulent returns. THORNDIKE’s clients are required to resolve their own tax liability with the IRS.
This case has been investigated by the Internal Revenue Service – Criminal Investigation and the Federal Bureau of Investigation. The case is being prosecuted by Assistant United States Attorneys Christopher Mattei and Eric Glover.
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