Federal Tax Prosecutions Serve As Reminder To Taxpayers To Comply With Tax Obligations As April 15 Deadline Approaches
CHICAGO – Three tax return preparers, a salesman, and the owner of a psychic reading business are among seven Chicago and suburban defendants who are facing federal prosecution in separate cases for alleged federal income tax crimes. These cases, along with others recently charged, are typical of federal tax prosecutions that occur throughout the year, but they also serve as a reminder to taxpayers of the importance of voluntary compliance with their tax obligations as the April 15 filing deadline approaches, federal law enforcement officials announced today.
“The IRS Criminal Investigation Division is committed to ensuring that all taxpayers pay their fair share,” said James C. Lee, Special Agent-in-Charge of the IRS Criminal Investigation Division in Chicago. “We are aggressively serving the American people by investigating criminal violations of the Internal Revenue Code. Tax fraud does not know a season – IRS special agents pursue criminals year round, not only at tax time. Taxpayers who might be thinking about cheating with this month's filing deadline looming should think twice or they will risk the consequences.”
Gary S. Shapiro, United States Attorney for the Northern District of Illinois, noted that in addition to criminal penalties, including incarceration, fines, and the costs of prosecution, convicted defendants remain responsible for any taxes and interest due, as well as civil penalties of up to 75 percent of the tax owed. Those making false claims against the government may be required to pay restitution or may be sued civilly for an amount greater than the fraudulent claims.
In one case, an arrest warrant was issued for COREY B. NORWOOD, 35, of Chicago, who was indicted on Wednesday by a federal grand jury on four counts of making false claims for federal tax refunds totaling nearly $1 million. In 2009, Norwood allegedly falsely claimed a refund in the amount of $94,450 in a false tax return he filed for the purported “Corey Norwood Trust.”
After filing a document in 2011 with the Cook County Recorder of Deeds stating that he was to be known as “Amun Re Barber El,” Norwood allegedly submitted to the IRS three false decedent estate tax returns for 2008, 2009, and 2010, indicating that Norwood had died and “Amun Re Barber El” was the executor of his estate. Each of the three estate returns allegedly falsely claimed a tax refund of $300,000, according to the charges. The government is being represented by Assistant U.S. Attorney Stephen Heinze.
A tax return preparer, MICHAEL SINGLETON, is awaiting sentencing after pleading guilty to preparing 549 fraudulent tax returns between 2005 and 2007 that caused the government a tax loss of $2,854,800. Singleton, 48, of Chicago and formerly of Homewood, operated ITA Services, and admitted preparing tax returns for clients that included fabricated information enabling them to obtain deductions for charitable contributions, rental properties, dependents, and business expenses, as well as other expenses that were non-existent and did not entitle his clients to a refund. Singleton was indicted in 2010 and pleaded guilty in June 2012 to two counts of assisting in the preparation of false tax returns. He faces a maximum sentence of three years in prison and a $250,000 fine on each count, and his plea agreement anticipates a federal sentencing guidelines range of 46 to 57 in prison. Singleton was scheduled to be sentenced today, but the sentencing was postponed and no new date has yet been set. (AUSA Tony U. Iweagwu, Jr.)
In other recent cases:
JOHN AUSTIN, 70, of Northlake, who owned and operated N-Less Travel & Taxes, a tax preparation business in Northlake, was charged with assisting in the filing of approximately 1,292 false tax returns for some 741 different clients for tax years 2008 through 2010, and causing the government a tax loss of approximately $1,292,000. Austin allegedly reduced the tax liabilities and increased the tax refunds for clients by fraudulently misrepresenting their filing status, overstating and misrepresenting expenses, and misrepresenting taxpayers’ eligibility to claim tax credits. Austin has pleaded not guilty to two counts of assisting in the preparation of false tax returns that were filed on March 4. (AUSA Andrew DeVooght.)
BILL COOPER, 39, of Schaumburg and formerly of Arlington Heights, who owned a psychic reading business in Arlington Heights and Tampa, Fla., pleaded guilty on March 7 to two misdemeanor counts of failing to file individual income tax returns. Cooper admitted that he earned gross income of approximately $305,427 in 2006; $311,751 in 2007; and $100,356 in 2008, and failed to file federal income tax returns for each of those years. Cooper faces a maximum sentence of a year in prison and a $100,000 fine on each of the two counts and his plea agreement anticipates a sentencing guidelines range of 15 to 21 months in prison. He is scheduled to be sentenced on July 15. (AUSA Tyler Murray.)
CAROL FORTINO, 53, of Woodridge, who was a tax return preparer associated with AAF Accounting, Inc., on the city’s northwest side, pleaded guilty on March 7 to assisting in the filing of at least 42 false tax returns for at least 15 separate clients for tax years 2006 through 2009, and causing the government a tax loss of approximately $103,947. Fortino admitted that she fraudulently increased the amount of tax refunds for taxpayers by overstating and misrepresenting expenses, such as claiming inflated property taxes, gifts to charity, and unreimbursed business expenses, which were used to decrease their taxable income. Fortino faces a maximum sentence of three years in prison and a $250,000 fine and her plea agreement anticipates a federal sentencing guidelines range of 18 to 24 months in prison. She is scheduled to be sentenced on July 11. (AUSA Kaarina Salovaara.)
PAUL URDAN, 46, of Highland Park, a commissioned salesman, has pleaded not guilty after being indicted in February on three felony counts of filing false federal income tax returns and two misdemeanor counts of failing to file tax returns. According to the charges, Urdan opened two bank accounts in the name of a business partnership and directed his employer to make his commission checks payable at various times to his wife and the partnership. Between 2006 and 2008, Urdan received commission income, both directly and indirectly through his wife and the business partnership, totaling $332,253 in 2006; $466,173 in 2007; and $348,500 in 2008. Urdan allegedly filed false business partnership returns for 2006, 2007, and 2008. The charges also allege that he failed to file individual tax returns for 2007, when he received gross income of approximately $466,173, and for 2008, when he received gross income of approximately $348,500, the charges allege. (AUSA Christopher McFadden.)
TOWANA VIRAMONTES, 37, of McHenry, has pleaded not guilty after being indicted in January on 15 counts of making false claims for tax refunds in 2008 and 2009. Viramontes, who was the principal of a telemarketing business that operated under various names, including American Creative Solutions, Inc., Apple Leasing, Inc., and Leads 2 Guaranteed Loans, allegedly prepared false Forms W-2 that she provided to at least 15 individuals, some of whom worked for her business and some who did not. The charges allege that Viramontes caused these individuals to file false claims for income tax refunds, typically a few thousand dollars each, using the false W-2s that she provided and then to pay her a substantial portion of the tax refunds they obtained. (AUSA Dylan Smith.)
Assisting in the preparation of false tax returns or filing a false tax return carries a maximum sentence of three years in prison and a $250,000 fine on each count. Making a false claim upon the United States carries a maximum sentence of five years in prison and a $250,000 fine. Failing to file an income tax return, a misdemeanor, carries a maximum sentence of a year in prison and $100,000 fine. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The public is reminded that criminal charges are not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.