Local Tax Preparer Arrested
|Feb. 20, 2014|
HOUSTON - Diane Caldwell Larry has been charged in a 21-count indictment alleging 19 counts of preparing false client tax returns and two counts of interfering with the enforcement of tax laws, announced United States Attorney Kenneth Magidson along with Lucy Cruz, special agent in charge of Internal Revenue Service-Criminal Investigation.
“Those who might consider preparing false tax returns this filing season should be aware of the consequences of their actions,” said Cruz. “This indictment emphasizes that the Internal Revenue Service and U.S. Attorney’s office will continue their aggressive pursuit of those who attempt to defraud America's tax system. Taxpayers should also be very cautious when selecting someone to prepare their returns because ultimately they are responsible for what gets filed with the IRS.”
The indictment was returned Feb. 12, 2014, and unsealed yesterday upon her arrest. She is expected to make an initial appearance before U.S. Magistrate Judge George C. Hanks Jr. at 10:00 a.m. today.
According to the indictment, Larry operated a tax return preparation business in Houston under the name Paradise South Tax Services. She allegedly prepared dozens of materially false client tax returns during calendar years 2008 through 2011. The indictment also alleges she included in these tax return bogus “side business” losses and false and excessive itemized deductions and credits in order to generate excessive refunds totaling approximately $200,000. The indictment further alleges that when some of these tax returns were audited, Larry made up false documents to create an illusion of legitimacy for some of the false
and excessive itemized deductions.
If convicted, Larry faces up to three years in federal prison and a possible $250,000 fine on each count.
The case, investigated by IRS-CI, is being prosecuted by Assistant United States Attorney Jimmy Sledge Jr.
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.