The United States Attorney's Office

GARDENA TAX RETURN PREPARER WHO HELPED CLIENTS AVOID $2.7 MILLION IN TAXES SENTENCED TO SIX YEARS IN PRISON

LOS ANGELES - A Gardena tax return preparer who falsely told clients that he had been employed by the Internal Revenue Service and prepared hundreds of federal tax returns with inflated deductions was sentenced this morning to six years in federal prison in the scheme that cost the government more than $2.7 million.

James Otis Swift, 62, who is currently in custody after being convicted in an unrelated case, was sentenced by United States District Judge S. James Otero.

In September, Swift pleaded guilty to two felony tax offenses, admitting that he prepared hundreds of false income tax returns for the tax years 2002 through 2007. The tax returns were fraudulent because they contained inflated deductions for charitable contributions, business expenses, personal property taxes, and home mortgage interest payments. In his plea agreement, Swift specifically admitted that he inflated deductions for home mortgage interest, which his clients claimed on their tax returns, by more than $12.5 million. As a result of the false returns, Swift caused the federal government to incur a loss of more than $2,762,141, excluding interest and penalties. Prosecutors noted in court documents that this number is extremely conservative for a number of reasons, one being that the figure only includes the federal tax loss, not the losses suffered by the State of California.

When some of Swift's clients received audit notices from the IRS, Swift assisted his clients in evading the payment of their tax liability and in obstructing the audits by fabricating false charitable contribution letters and Forms 1098, which detailed mortgage interest paid.

The investigation of Swift was conducted by IRS-Criminal Investigation's Los Angeles Field Office.

#####