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Justice News

Department of Justice
U.S. Attorney’s Office
Northern District of California

FOR IMMEDIATE RELEASE
Wednesday, July 18, 2018

Cotati Resident Pleads Guilty To Tax Fraud

SAN FRANCISCO – Stanley Charles pleaded guilty in federal court in San Francisco today to preparing and presenting a false and fraudulent federal income tax return and filing a false amended federal income tax return, announced Acting United States Attorney Alex G. Tse and Acting Special Agent in Charge Internal Revenue Service Tara Sullivan. The plea was accepted by the Honorable Maxine M. Chesney, U.S. District Judge.

In pleading guilty, Charles, 33, of Cotati, Calif., admitted to preparing and filing a fraudulent federal income tax return for two clients, a husband and wife, without their knowledge or permission.  This tax return falsely reported that the couple had $8,000 in higher qualified education expenses.  Along with the false return, Charles filed an IRS Form 8888 [Allocation of Refund] directing the IRS to split the tax refund by paying $5,447 to the couple and the remaining $1,235 to his own bank account.   Charles also admitted to preparing and filing with the IRS his own false 2011 Amended U.S. Individual Income Tax Return. His return falsely reported a $9,873 American Opportunity Credit although Charles knew the credit was no more than $2,500.  Charles also admitted that he prepared and filed an additional 428 false and fraudulent federal income tax returns for 2009 through 2015, which sought tax refunds generated by false deductions and/or credits.   

Charles was charged in an information filed on June 18, 2018, with one count of aiding and assisting in preparation and presentation of false tax returns, in violation of 26 U.S.C. § 7206(2), and one count of filing a false tax return, in violation of 26 U.S.C. § 7206(1).  Under today’s plea agreement, Charles pleaded guilty to both counts. 

Charles is currently released on a $100,000 bond. 

Judge Chesney scheduled Charles’s sentencing hearing for October 24, 2018, at 2:15 p.m.  The maximum statutory penalty for each count in the information is 3 years in prison and a fine of $250,000 plus restitution, if appropriate.  However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

Assistant U.S. Attorney Cynthia Stier is prosecuting the case.  The prosecution is the result of an investigation by the Internal Revenue Service.  
 

Updated July 18, 2018