ATLANTA - With the tax deadline quickly approaching for individual taxpayers, it is important to be aware of tax scams as well as the importance of being compliant in filing and paying federal taxes timely. Tax cheats are becoming more sophisticated in their schemes and are finding new ways to cheat the system as well as gaining access to your personal and tax information.
“Criminals continue use tax fraud schemes to steal from tax-payers,” said U.S. Attorney Byung J. “BJay” Pak. “Be honest and truthful in your tax filings, and beware of others who look to take advantage of you and the tax system.”
“We have IRS Special Agents located here in Georgia working around the clock to uncover, stop and work with the U.S. Attorney’s Office in prosecuting tax crimes. With the filing season coming to an end, it’s important that the public be aware of various tax schemes and report the scheme to either the IRS or their local police department,” said Thomas J. Holloman, Special Agent in Charge of IRS-CI, Atlanta Field Office.
The U.S. Attorney’s Office for the Northern District of Georgia, along with agents of IRS-Criminal Investigation and other law enforcement partners, is actively engaged in investigating and prosecuting tax fraud as well as combatting those criminals willing to steal identities and commit tax fraud on the unsuspecting public. Over the past year, multiple tax investigations were successfully resolved, with approximately 13 convicted individuals sentenced related to fraudulent tax schemes since May of 2018. The following are highlights of some of those cases:
On December 10, 2018, Lakeisha Stone of Fairburn, Georgia was sentenced to four years, two months in federal prison, to be followed by three years of supervised release and ordered to pay restitution of $392,174 to the IRS for her role in a scheme to defraud the IRS. Stone used two other individuals as nominee names to obtain fraudulent Electronic Filing Identifying Numbers and Preparer Tax Identification Numbers to prepare false income tax returns. Stone also stole the identities of some of her tax customers and cashed stolen treasury checks. Stone used the Atlanta-based businesses Taxes R’ Us, Taxs R’ Us, and Tax Tyme to commit her fraudulent activity.
On November 15, 2018, Stephanie Parker of Atlanta, Georgia was sentenced to two years in federal prison, to be followed by one year of supervised release and ordered to pay $5,964 in restitution to the IRS for a scheme to use stolen identities to defraud the IRS. Parker was an employee of the IRS and worked in the IRS office located in Chamblee, Georgia. From September of 2012 through April of 2013, Parker accessed taxpayers’ personal identifying information (“PII”) while employed as a customer service representative for the IRS. Parker took those taxpayers’ PII and filed fraudulent tax returns with the IRS in those names.
Joseph Racine & Arnouse Merlien
On November 8, 2018, Joseph Racine, of Boynton Beach, Florida, was sentenced to three years, four months in federal prison, to be followed by three years of supervised release and Arnouse Merlien, also of Boynton Beach, was sentenced to three years in federal prison, followed by three years of supervised release and both were ordered to pay $3,854,915 in restitution to the IRS for conspiracy to defraud the IRS. Racine was the owner of JSR Westend Tax Services, located in Atlanta, and JSR Tax Services, located in Greenacres, Florida. Merlien was the office manager of JSR Tax Services in Florida. The IRS-CI 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.
Michael Jon Kell
On October 16, 2018, Michael Jon Kell of Powder Springs, Georgia was sentenced to one year, six months in federal prison, followed by one year of probation and ordered to pay $321,878 in restitution to the IRS for a twenty year tax scheme to funnel millions of dollars in assets through a church he created in order to evade filing federal tax returns. Dr. Kell developed numerous patented technologies and worked as a consultant, which generated millions of dollars in income over the years. In an attempt to hide this income, he founded and claimed to be the “pastor” of the First Meliorite Church, which he said was a branch of the Universal Life Church. Dr. Kell directed his substantial income and assets into bank accounts belonging to the church—all of which were under Dr. Kell’s exclusive control. He used these accounts to cover all of his personal expenses—including overseas vacations, dining out, high-end clothing purchases, online dating services, and private school tuition for his children. Dr. Kell also transferred ownership of his multi-million dollar residence in Vinings several times over the years to various entities he created and controlled, in an effort to protect the property from creditors, including the IRS.
On April 8, 2019, Hanh Tran of Lilburn, Georgia was sentenced to ten months of home confinement, to be followed by twelve months of supervised release and ordered to pay $124,812 in restitution to the IRS for willfully filing a false tax return with the IRS. For the tax years 2010 through 2014, Tran underreported his total income causing an underreporting of his tax liability of $124,812. Hanh Tran is the C.E.O. of Glamour Salon & Spa, Inc. located in Marietta, Georgia.
Go to https://www.irs.gov/newsroom/irs-concludes-dirty-dozen-list-of-tax-scams-for-2019-agency-encourages-taxpayers-to-remain-vigilant-year-round for more information on the Dirty Dozen for the 2019 filing season.
For Atlanta Field Office IRS-Criminal Investigation interview requests or questions, please contact their Public Information Officer at Joseph.Ziegler@ci.irs.gov.
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.