United States Attorney
Northern District of Texas

1100 Commerce St., 3rd Fl.
Dallas, Texas 75242-1699

Telephone (214) 659-8600
Fax (214) 767-0978

Irving, Texas, Tax Preparer Sentenced to 36 Months Imprisonment
following Tax Fraud Conviction

United States Attorney Richard B. Roper announced that Leanne Denice Shrout was sentenced today by the Honorable Barefoot Sanders, United States Senior District Judge, to 36 months imprisonment following her guilty plea in May to several federal tax fraud charges. Shrout, who operated Executive Financial Consultants, located at 136 South Main Street, #116, in Irving, Texas, pled guilty to three counts of aiding and assisting in the preparation and presentation of a false and fraudulent tax return, in violation of 26 U.S.C. § 7206(2).

According to documents filed in court, before starting her own business as a tax return preparer, Shrout worked for H & R Block as a tax return preparer. She was trained and knew the proper rules, laws, and procedures to follow to complete legal tax returns and legal amended tax returns.

Even though Shrout knew the proper rules to prepare a correct tax return, she would inaccurately and falsely advise and counsel her clients that the following things were deductible on the Schedule A form: personal clothing worn to work; personal hygiene items; vitamins; gym fees; haircuts; manicures and pedicures; mileage to and from work; and money spent at restaurants. Shrout would also inform her clients of other things that were not true: that she spent three months out of every year in school at the IRS, that she can call the IRS and push through a tax return; that she has only had one client ever audited by the IRS; and that if the client was audited, she would accompany her client to meet with the IRS.

According to the factual resume, Shrout admitted that when a person brought in their tax information to be prepared, she would suggest that he bring in his past tax returns as well, indicating that she would look at the tax return to determine if it was correct. Shrout would then prepare an amended tax return for those past years, claiming the taxpayer was owed more. She would do this by fabricating deductions, overstating deductions, or claiming unlawful deductions, well knowing these deductions were false and they were material to the IRS. After Shrout completed the tax return, she would give it to her client without reviewing the specific deduction amounts with the client, only focusing on the increased refund amount.

Shrout admitted that she charged approximately $125 to prepare a tax return and approximately $75 to prepare an amended tax return. She admitted to preparing at least 788 false tax returns or false amended tax returns beginning approximately 1999, and continuing through June 2002.

U.S. Attorney Roper acknowledged and praised the investigative efforts of the Internal Revenue Service - Criminal Investigation. The case was prosecuted by Assistant United States Attorney Dayle Elieson.

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