FOR FURTHER INFORMATION CONTACT
AUSA VICKIE E. LEDUC at 410-209-4885
MARCH 7, 2006
FOR IMMEDIATE RELEASE
PRESIDENT OF TAKOMA PARK TAX PREPARATION BUSINESS
INDICTED FOR PREPARING FALSE TAX RETURNS
U.S. Attorney Warns Taxpayers Not to File Fraudulent Tax Returns
GREENBELT, Maryland - United States Attorney for the District of Maryland Rod J. Rosenstein announces that a federal grand jury has indicted Jiten D. Mehta, age 46, of Silver Spring, Maryland for preparation of false tax returns, wire fraud and money laundering, in connection with his tax preparation business.
United States Attorney Rod J. Rosenstein said, “The IRS is cracking down on people who put false information on tax returns in order to get bigger refunds. People who file false tax returns may face large civil penalties and criminal prosecution. Anyone with information about tax fraud should report it to the IRS.”
Tax fraud can be reported to the Internal Revenue Service through the internet, at http://www.irs.gov/compliance/, or by telephone at 1-800-829-0433.
Mehta, a certified accountant licensed in Maryland, was president of JDM World Financial Services, Ltd. (“JDM”), a tax preparation business located at 1327 University Boulevard, Takoma Park, Maryland. The 27-count indictment, which was returned yesterday, charges that from January 26, 2001 to April 16,2003, Mehta prepared and caused the preparation of false IRS Forms 1040 and 1040A individual income tax returns using false information as to the clients’ filing status, profit or loss from business, exemptions, and other matters, giving rise to deductions and credits to which the taxpayers were not entitled. Mehta and JDM generally did not have taxpayers review their completed tax returns to determine their accuracy prior to filing the returns with the IRS.
Additionally, according to the indictment, Mehta and JDM filed clients’ tax returns electronically with the IRS and participated in the Refund Anticipation Loans (“RAL”) program offered by BankOne in Columbus, Ohio. The RAL program permits participating banks to make tax refunds to taxpayers before they get their actual refunds; the later refund check from the IRS is then used to reimburse the bank. The indictment alleges that from January 2000 through December 2002, JDM submitted returns electronically on behalf of more than 2,600 clients who participated in the RAL program and sought tax refunds of more than $3 million.
Approximately $600,000 in fees was deducted from the RALs to pay Mehta’s tax preparation fees. Mehta prepared tax returns with fraudulently inflated Schedule A deductions intended to generate large refunds for taxpayers and fraudulently listed expenses on IRS Form 2106, Employee Business Expenses, to justify the deductions listed on the Schedule A. By generating fraudulent refunds for taxpayers, Mehta encouraged them to continue to use JDM to prepare their taxes and to refer other taxpayers to JDM.
Finally, the indictment alleges that Mehta used $318,000 gained through this scheme to purchase properties in Silver Spring and Takoma Park, Maryland. The indictment also contains a forfeiture count ordering that $318,000 be forfeited to the government.
Mehta faces a maximum penalty of 3 years in prison and a $100,000 fine for each count of aiding and assisting in the preparation of false tax returns; 5 years in prison and a fine of $250,000 for each count of wire fraud; and 10 years in prison and a fine of up to twice the value of the criminally-derived property for each count of money laundering.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
United States Attorney Rod J. Rosenstein commended the investigative work performed by the Internal Revenue Service - Criminal Investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys Daphene McFerren and David Salem, who are prosecuting the case.
This page last modified—March 7, 2006