Seven North Carolina Tax Preparers Plead Guilty to Conspiring to Defraud the IRS
Seven Charlotte, North Carolina tax return preparers pleaded guilty to conspiracy to defraud the United States by preparing and filing false tax returns, announced Principal Deputy Assistant General Richard E. Zuckerman of the Justice Department’s Tax Division, U.S. Attorney R. Andrew Murray for the Western District of North Carolina, and Special Agent in Charge Matthew D. Line of the Internal Revenue Service-Criminal Investigation (IRS-CI).
Joseph Octave and Vonyeda Carson pleaded guilty on Jan. 12, 2021, while Melissa Greene, Natisha Holloman, Kimberly Joline, Whitney Vargas-Medrano and Wendia Courtois pleaded guilty earlier in 2020. In addition to the conspiracy charge, Octave pleaded guilty to one count of aiding and assisting in the filing of false tax returns.
According to court documents and statements made in court, Octave owned and operated Kapital Financial Services, a tax preparation business with two offices located in Charlotte. From 2014 through at least 2019, Octave and certain employees, specifically Carson, Courtois, Vargas-Medrano, Greene, Holloman, and Joline conspired to falsify clients’ tax returns by claiming deductions, business losses, American Opportunity credits, education credits, and earned income tax credits that the clients did not incur, in order to fraudulently increase refunds to be paid by the IRS. Octave trained employees on how to file false returns and provided them with scripts and cheat sheets. Octave instructed employees not to provide clients with copies of their tax returns and not to review the completed tax returns with clients beyond the refund amount. By filing false returns, Octave and his co-conspirators increased their client base and unjustly enriched themselves. As owner, Octave received the largest share of the $700,000 earned by Kapital Financial Services in preparation fees.
U.S. District Judge Max O. Cogburn Jr. will schedule sentencing at a later date. At sentencing, Octave faces a maximum of eight years in prison, and Carson, Courtois, Greene, Holloman, Joline, and Vargas-Medrano each face a maximum of five years in prison. They all also face a period of supervised release, restitution, and monetary penalties.
Principal Deputy Assistant Attorney General Zuckerman, the U.S. Attorney’s Office, and Special Agent in Charge Line commended special agents of IRS-Criminal Investigation, who conducted the investigation, and Assistant U.S. Attorney Caryn Finley and Trial Attorney Brian Flanagan of the Tax Division, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.