Three individuals sentenced for roles in fraud and identity theft ring that stole over $6 million in government funds
ATLANTA - Joseph Racine and Arnouse Merlien have pleaded guilty to conspiracy to violate the federal income tax laws by purposely misrepresenting to the IRS that their clients were qualified to receive certain tax credits and deductions on their federal tax returns. Racine is the owner of JSR Westend Tax Services, located in Atlanta, Georgia and JSR Tax Services, located in Greenacres, Florida.
“These defendants defrauded taxpayers of over $3,500,000 by falsely claiming tax credits and expenses on tax returns,” said U.S. Attorney Byung J. “BJay” Pak. “Tax preparers and others who steal from the public fisc by deliberately devising schemes to cheat the system will be vigorously prosecuted.”
“The IRS uses all of its investigative resources to uncover abusive tax return preparers who knowingly file fraudulent tax returns for the benefit of themselves and others,” said Thomas J. Holloman, Special Agent in Charge, IRS Criminal Investigation. “The IRS is actively pursuing these bad return preparers and are holding them accountable for their criminal actions.”
According to U.S. Attorney Pak, the charges and other information presented in court: In December 2016, Internal Revenue Service - Criminal Investigation (IRS-CI) identified JSR Westend Tax Services as potentially filing fraudulent returns for tax years 2013 through 2015. The investigation revealed that Racine was filing fraudulent returns involving multiple credits and deductions, including the fuel tax credit, refundable education credit, and unreimbursed employee business expenses. Racine requested refunds on 99 percent of the returns, a rate significantly higher than the average over the same years. In March 2017, IRS-CI determined that JSR Tax Services in Florida, where Merlien primarily worked, was filing federal tax returns displaying the same patterns of fraud as those prepared at JSR Westend Tax Services in Atlanta.
The investigation revealed that Racine and Merlien engaged in this scheme to increase the amount of money they could charge their clients for preparing their returns. The investigation further revealed that the fraud perpetrated by Racine and Merlien resulted in losses to the U.S. Government in excess of $3,500,000.
Sentencings for Joseph Racine, 37, and Arnouse Merlien, 40, both of Boynton Beach, Florida, have been scheduled for September 6, 2018, before U.S. District Judge Leigh M. May.
This case is being investigated by the Internal Revenue Service Criminal Investigation.
Assistant U.S. Attorney Michael Herskowitz is prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at USAGAN.PressEmails@usdoj.gov or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.