Parker CPA Indicted for Wire Fraud, Mail Fraud and Aiding and Assisting in the Preparation of False Tax Returns
DENVER – Donald Iley, age 52, of Parker, Colorado, was indicted by a federal grand jury in Denver on August 24, 2016 on charges of wire fraud, mail fraud, and aiding and assisting in the preparation of false tax returns, the United States Attorney’s office and IRS – Criminal Investigation announced. The indictment remained under seal until Iley made his initial appearance on September 7, 2016 in U.S. District Court before U.S. Magistrate Judge Kathleen M. Tafoya.
According to the indictment, from January 2011 through November 2015, Donald Iley was the owner and operator of Iley and Associates (I&A), an accounting and tax preparation firm which provided services to more than 140 businesses in Colorado. For some of I&A’s clients, payroll accounting and payroll tax services were provided, including the preparation of Forms 941, Employer’s Quarterly Federal Tax Returns. An “ACH Deduction Report” was also prepared listing the amount of payroll taxes to be withdrawn from the client’s bank account and paid forward to the Internal Revenue Service. Iley initiated or caused others to initiate an ACH electronic fund transfer from the client’s bank account to a bank account controlled by I&A.
Then Iley caused the Form 941 tax return to be mailed to the client with a cover letter stating the enclosed tax return is a copy for their records and Iley pays the taxes for the client. As part of the scheme, instead of forwarding the funds I&A received from the clients via electronic ACH fund transfers to the IRS, Iley used the money for his own purposes.
In certain instances, Iley prepared and submitted payroll tax returns to the IRS on behalf of some clients showing no payroll taxes due and owing for a given tax period. Iley knew when he submitted these payroll tax returns that the clients did in fact owe payroll taxes.
“Knowingly falsifying documents which are filed with the IRS is a crime,” said Kareem Carter, Acting Special Agent in Charge, IRS Criminal Investigation Denver Field Office. “While most return preparers provide excellent service to their clients, a few unscrupulous tax preparers file false and fraudulent returns to defraud the government and their own clients. Individuals who engage in this type of financial fraud should know they will not go undetected and will have to answer for their actions.”
Iley was charged with 12 counts of wire fraud and 2 counts of mail fraud, each of which carries a penalty of up to 20 years in prison. He is also charged with 18 counts of aiding and assisting in the preparation of false tax returns, which each carries a penalty of up to 3 years in prison. Each charge also carries with it a fine of up to $250,000 or twice the amount of gain or loss, whichever is greater.
This case is being investigated by the Internal Revenue Service – Criminal Investigation. The case is being prosecuted by Assistant United States Attorney J. Chris Larson.
The charges contained in this indictment are allegations, and the defendant is presumed innocent until proven guilty.