Denver man is found guilty of Conspiracy to Defraud the IRS and False Statements
DENVER – Austin Ray, age 48, of Denver, Colorado, who owned and operated Cheapertaxes LLC in Denver, CO, was convicted by a jury late Wednesday night in U.S. District of Colorado on one count of conspiracy to defraud the United States, two counts of assisting in the preparation of false income tax returns, and two counts of signing and submitting his own false tax returns, announced U.S. Attorney John Walsh and IRS Criminal Investigation Special Agent in Charge Stephen Boyd.
Ray and his co-conspirator Anne Rasamee, were Indicted by a federal grand jury in Denver on April 10, 2014 followed by a superseding Indictment on December 2, 2014 and a 2nd superseding Indictment of January 6, 2015. Rasamee pled guilty on January 20, 2015 to one count of conspiracy to defraud the United States.
Ray and Rasamee owned and operated Cheapertaxes LLC, a tax preparation business in Colorado. Beginning in March 2006 through April 2010, they conspired to defraud the IRS by preparing fraudulent income tax returns containing false income and deductions, for the purpose of obtaining inflated tax refunds for their clients. They falsified itemized deductions on Schedule A, business losses on Schedule C and personal exemptions.
They used ProSeries tax software to prepare their clients' returns. The software included a function that summarized the tax due and the amount of the refund as the preparer entered information in to the tax return. This summary continuously updated as information was added or deleted. Rasamee and Ray watched this summary as they entered information on the tax return, inflating and/or fabricating taxpayers' expenses and deductions in order to maximize the refund and minimize the tax due and owing. In short, they "played with the numbers" until they had entered enough deductions and expenses that as much of the tax due and owing as possible was converted into a refund.
They usually charged their clients a flat fee of $200 to $250 for the return preparation. If clients could not pay the fee at the time of the return preparation, they would take the fee out of the taxpayer's refund. To do so, they caused the refund to be deposited into the Cheapertaxes bank account. To further conceal the scheme, they would list a third party who had not prepared the fraudulent tax return as the return preparer on the client’s return.
Ray and Rasamee shared the proceeds from their business and spent the funds on living expenses for their family as well as luxury items. For example, in 2009, Rasamee and Ray purchased a used Bentley and a used Maserati for $140,000 cash.
Conspiracy to defraud the United States carries a penalty of not more than 5 years in federal prison, and a fine of up to $250,000. A false statement to the IRS carries a penalty of not more than 3 years in federal prison, and a fine of up to $250,000.
“The defendant thought he could become wealthy on the back of U.S. taxpayers," said U.S. Attorney John Walsh. "Thanks to the hard work of the jury, the presentation by the two Assistant U.S. Attorneys, and the investigation conducted by the IRS CI, this tax cheat will be held accountable for his crimes."
"This is a prime example of a return preparer you want to avoid. As we approach filing season, choose carefully when hiring a tax preparer and avoid tax preparers who claim they can obtain larger refunds than other preparers," said Stephen Boyd, Special Agent in Charge for IRS Criminal Investigation, Denver Field Office.
For tips on Choosing a Tax Professional go to www.irs.gov.
This case was investigated by Internal Revenue Service – Criminal Investigation with assistance from the Special Enforcement Program of the Internal Revenue Service and prosecuted by Assistant U.S. Attorneys Anna Edgar and Tim Neff.