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Friday, May 16, 2008
(202) 514-2007
TDD (202) 514-1888

North Carolina Federal Court Shuts Down
Alleged Tax Preparation Scam

Charlotte Man Allegedly Fabricated Deductions and Credits for Customers

WASHINGTON - A federal court in Charlotte, N.C., has permanently barred Kodjovi Raphael Totou from preparing tax returns for anyone other than himself, the Justice Department announced today. The permanent injunction order replaces a preliminary injunction entered earlier this year.

The government’s complaint in the case alleged that Totou operated Charlotte-based Queen City Tax Services, which prepared more than 450 tax returns since 2004 and claimed fraudulent fuel tax credits and various other fabricated or inflated tax deductions. The complaint stated that Totou targeted immigrants from Togo with minimal fluency in English and little, if any, understanding of the U.S. tax laws and the deductions taken on their behalf.

The complaint cited one customer whose return, as prepared by Totou, reported a total income of $704 but claimed a fuel tax credit for the purchase of 23,635 gallons of gasoline (approximately $47,000 of gasoline), even though the customer would have had to spend more than 60 times his reported total income to buy that much gasoline. Based on a limited examination of 17 returns, the complaint noted that the Internal Revenue Service (IRS) determined that Totou caused a tax loss of approximately $56,000.

The court order requires Totou to notify his customers of the permanent injunction. He is also barred from representing any of his past customers in matters before the IRS.

“Fraudulent tax preparers, like Totou, who take advantage of hard-working and vulnerable immigrant populations, should know that the Tax Division and the IRS are committed to shutting them down and putting them out of business,” said Nathan J. Hochman, Assistant Attorney General for the Justice Department’s Tax Division. “Since 2001, the Tax Division has obtained injunctions against more than 330 fraudulent tax return preparers and tax-fraud promoters.”

Information about these cases is available on the Justice Department Web site, as is information about the Justice Department’s Tax Division.