The U.S. Attorney's Office and IRS remind people that violating tax laws can bring serious consequences
Several people have been found guilty and sentenced for violating federal tax laws over the past few months, said Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio, and Kathy Enstrom, Special Agent in Charge of IRS-Criminal Investigation’s Cincinnati Field Office.
As the 2015 tax filing deadline approaches, these cases serve as reminders that there are civil and sometimes criminal penalties to filing erroneous tax returns.
“Tax day is not fun, but the vast majority of Americans who properly report and pay their fair share need to know that we will aggressively prosecute those who shirk or flaunt their obligations,” Dettelbach said.
“The April 15th tax deadline is fast approaching and to build faith in our nation’s tax system, honest taxpayers need to be reassured that everyone is paying their fair share as our system of taxation depends on voluntary compliance by each and every citizen,” Enstrom said. “IRS Criminal Investigation, together with the U.S. Attorney’s Office, will investigate and prosecute those who violate our tax system. The joint announcement of these criminal cases should serve as a warning to anyone who might consider evading their federal tax obligations.”
Details on a few cases over the past year:
Brian D. Krantz, 48, of Twinsburg, was sentenced last year to nearly five years in prison for his role in a $8.8 million conspiracy in which he filed false income tax returns claiming refunds to which he was not entitled. Based on those false claims, the U.S. Treasury issued 17 refund checks totaling approximately $3.6 million payable to Krantz and various corporations he controlled, according to court documents.
Sean Houston, 46, of Cleveland, was charged in a 33-count indictment with preparing dozens of false tax returns and falsely claiming more than $133,000 in refunds. In 2010, Houston prepared false tax returns, listing fictitious wages and income-tax withholdings when he knew no wages had been earned and no taxes withheld. The returns also claimed “making work pay” tax credits to which the claimants were not entitled, according to the indictment.
John J. Manore III, 58, of Toledo, was indicted this year on three counts of filing false tax returns. Manore filed tax returns from 2009 through 2011 in which he significantly underreported the amount of taxable income he earned, according to the indictment.
Ghana Johnson, 45, of Pepper Pike, was indicted for claiming $476,000 in fraudulent tax refunds for herself and others. She electronically filed 106 tax returns for 2010 and 2011 in which she falsified wage income, federal income tax withholdings, dependents, exemptions and tax credit information in order to obtain income tax refunds for which neither Johnson nor the individuals she prepared the income tax returns for were entitled, according to the indictment.
Zinara M. Highsmith, 35, of Fayetteville, Georgia, is scheduled to be sentenced in June for filing approximately 2,750 tax returns containing false refund claims of more than $4.8 million. Highsmith ran the Atlanta-based tax-preparation business WE XL LLC. In 2011, Highsmith partnered with a minister in Arkansas in a scheme to file false tax returns. The minister’s role was to recruit and obtain personal identification information from claimants and to provide the information to Highsmith, who was responsible for the preparation of the false returns. The minister did this by inducing other ministers and church leaders in various states, including Ohio, to solicit members of their congregations to apply for benefits under the so-called government stimulus program. Nearly 1,000 false claims were made on behalf of people living in Northeast Ohio, resulting in false claims of nearly $1.7 million, according to court documents.
Walter Berkovic, of Monsey, N.Y. pleaded guilty last month to one count of failing to file a Report of Foreign Bank and Financial Accounts (FBAR) with the IRS disclosing that he had a financial interest in an UBS financial account in a foreign country for the 2004-2008 income tax years. Citizens and U.S. residents are obligated to report their income from any source, including dividends and interest, regardless of whether the source of their income is from within or outside the U.S. In addition, on Schedule B of the IRS Form 1040, the taxpayer must indicate whether at any time during the calendar year the taxpayer had an interest in or signature authority over a financial account in a foreign country. If this is the case, the taxpayer must indicate the name of the particular country in which the account was located and the taxpayer must file a FBAR for an account with a value of more than $10,000. UBS is a bank with its headquarters in Zurich, Switzerland. Between 1991 and 2008, Berkovic had a financial interest in or signature authority over two undeclared accounts at UBS with a value of approximately $713,000. The IRS Criminal Investigation Office in Akron investigated the Berkovic case.