Joliet Area Tax Preparer Pleads Guilty To Filing Hundreds Of False Returns, Causing IRS To Lose More Than $5.3 Million
CHICAGO — A Joliet area tax preparer pleaded guilty today to filing hundreds of false federal income tax returns for clients, causing the Internal Revenue Service to lose more than $5.3 million. The defendant, JEFFREY SHELBY, JR., 31, of Joliet, pleaded guilty at his arraignment after being charged last week in U.S. District Court.
With the 2014 tax season just getting underway, IRS officials said the case serves as a reminder to tax preparers and taxpayers alike to comply with their tax obligations. “While most return preparers are honest and provide excellent service, others file false returns to defraud their clients and the United States government,” said James C. Lee, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago.
The guilty plea was announced by Mr. Lee and Zachary T. Fardon, United States
Shelby pleaded guilty to two counts of aiding and assisting in the preparation of false federal income tax returns. He faces a maximum sentence of three years in prison and a fine of $250,000 on each count. U.S. District Judge Sara L. Ellis scheduled a status hearing for March 24 to set a sentencing date.
Between at least 2009 and 2012, Shelby owned Shelby Investment LLC, which had two
locations, one in Crest Hill and the other in Joliet, and he worked primarily in the Crest Hill office. Shelby admitted that for tax years 2009 through 2012, he filed hundreds of individual income tax returns for clients, each of which fraudulently and intentionally reduced the tax liabilities and increased the tax refunds for those taxpayers. Among other ways, Shelby overstated and misrepresented taxpayers’ eligibility to claim tax credits, including education credits and the Earned Income Credit; misrepresented taxpayers’ business income and expenses; and overstated and misrepresented his clients’ gifts to charity. As a result, he caused the IRS to lose approximately $5,350,243 in tax revenue.
Shelby is subject to an order to pay full restitution. The Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The government is being represented by Assistant U.S. Attorney Sarah Streicker.