Tax preparers sentenced to federal prison for conspiring to defraud the government of more than $3.8 million
ATLANTA - Joseph Racine and Arnouse Merlien were sentenced to federal prison for 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 was the owner of JSR Westend Tax Services, located in Atlanta, Georgia and JSR Tax Services, located in Greenacres, Florida. Merlien was the office manager of JSR Tax Services in Florida.
“These defendants defrauded the U.S. government out of more than $3.8 million by falsely claiming tax credits and expenses on tax returns prepared for clients,” said U.S. Attorney Byung J. “BJay” Pak. “Tax preparers who devise schemes to cheat the IRS can look forward to spending tax seasons behind bars.”
“Racine and Merlien lined their pockets by manipulating taxpayers’ returns for the sole purpose of generating large refunds and fees,” said Thomas J. Holloman, Special Agent in Charge, IRS-Criminal Investigation. “This is an important reminder that if you file false tax returns for others, we will find out and you will face the consequences.”
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 $3.8 million.
Joseph Racine, 38, of Boynton Beach, Florida, was sentenced by U.S. District Judge Leigh Martin May to three years, four months in federal prison, to be followed by three years of supervised release.
Arnouse Merlien, 40, also of Boynton Beach, Florida, was sentenced to three years, in federal prison, to be followed by three years of supervised release. Both defendants were ordered to pay $3,854,915 in restitution to the Internal Revenue Service.
This case was investigated by the Internal Revenue Service Criminal Investigation Division.
Assistant U.S. Attorney Michael Herskowitz, Deputy Chief of the Organized Crime and Gang Section, prosecuted 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.