SIBLING TAX PREPARERS SENTENCED IN FRAUDULENT TAX RETURN SCHEME
FRIDAY, MARCH 02, 2012
Public Affairs Officer
COLUMBUS – Sherrel D. Smith, 42, of Columbus was sentenced here today to one year and one day in prison on charges of aiding and assisting in the preparation and filing of false federal income tax returns. Her brother, Stephen Eugene Brooks, Jr., 40, also of Columbus was sentenced to four years probation for his role in the scheme.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, and Darryl Williams, Special Agent in Charge of the Cincinnati Field Office of the Internal Revenue Service Criminal Investigation, announced the sentences handed down today by U.S District Judge Algenon L. Marbley.
According to court documents, on October 25, 2011, Smith pleaded guilty to two counts of willfully aiding and assisting in the preparation of false federal income tax returns with the IRS and Brooks pleaded guilty to one count of aiding and assisting in the filing of a false federal income tax return. Pursuant to their plea agreements, Smith and Brooks agreed to be permanently barred from ever preparing or filing federal income tax returns on behalf of third parties.
Smith, who operated a tax preparation service under the name Executive Decisions at 5848 Emporium Square in Columbus, and Brooks, who brought in clients on a part-time basis, filed federal income tax returns using inflated or false Schedule A deductions, Schedule C business expenses with respect to purported sole proprietorships, Schedule E rental expenses regarding partnerships and rental real estate businesses, and inappropriate filing statuses in order to obtain false Earned Income Credits on behalf of their clients.
To further her scheme and conceal her fraudulent activities, Smith altered documents and created false documents in support of the bogus and inflated deductions she placed on her clients’ income tax returns, one of which was submitted to an IRS Revenue Agent on behalf of a client under audit.
The actions of Smith and Brooks resulted in hundreds of their clients being audited and assessed income taxes by the IRS.
Smith was ordered to serve one year of supervised release after her prison term and must pay $241,886 in restitution to the IRS. Brooks was ordered to pay $13,933 in restitution to the IRS.Stewart commended the IRS agents who investigated the case and Assistant U.S. Attorney Dan Brown who prosecuted the case.