Owner of Financial Services Business Convicted of Preparing False Tax Returns
ALEXANDRIA, Va. – A federal jury convicted an Annandale man today on charges of conspiracy, aiding in the preparation of false tax returns, mail and wire fraud. The jury also determined that over $1.34 million should be forfeited as proceeds of the crime.
According to court records and evidence presented at trial, Jose Manlapaz, 55, owned and operated a tax preparation business named JBM Financial Services or JBM Financial Group in Falls Church, Virginia. Between 2007 and 2017, Manlapaz prepared thousands of false tax returns for his clients by adding false or inflated items, including education credits, childcare expenses, and fake businesses. Manlapaz knew that the items he added to client returns would cause many clients to be audited, and set up a document mill in the Philippines called TMendoza Accounting Services to fabricate fake receipts and tax forms that he could submit on behalf of his clients to the IRS. Manlapaz made money by charging higher fees for getting clients higher refunds and for preparing fraudulent responses to IRS audit notices. After he learned of the criminal investigation in 2013, Manlapaz and JBM kept preparing false tax returns, but removing his preparer information so it looked like his clients were submitting the returns.
Manlapaz was convicted on Wednesday of conspiracy, aiding in preparation of false tax returns, mail fraud and wire fraud. He faces a maximum sentence of 20 years in prison when sentenced on September 28. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia, and Kelly R. Jackson, Acting Special Agent in Charge, Washington, D.C. Field Office, IRS-Criminal Investigation (IRS-CI), made the announcement after U.S. District Judge Anthony J. Trenga accepted the verdict. Assistant U.S. Attorneys Katherine L. Wong and Kimberly R. Pedersen are prosecuting the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information is located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:17-cr-115.