Convicted Tarrant County Tax Preparers Sentenced To Lengthy Federal Prison Sentences
Husband And Wife, Who Operated Jacqueline Morrison & Associates In Arlington And Fort Worth, Are Each Sentenced To Serve 187 Months In Federal Prison
FORT WORTH, Texas — A husband and wife who were convicted at trial on multiple felony offenses stemming from their operation of a tax return preparation business in Tarrant County, were sentenced this morning by U.S. District Judge John McBryde, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.
Jacqueline Morrison and Gladstone Morrison, who operated Jacqueline Morrison & Associates (JMA) on North Collins in Arlington, Texas, and on James Street in Fort Worth, Texas, were each sentenced to serve 187 months in federal prison. In addition, Judge McBryde ordered them to pay nearly $18 million in restitution.
Specifically, in October 2014, a federal jury convicted Jacqueline and Gladstone Morrison each on one count of conspiracy to aid and assist in the preparation and presentation of false and fraudulent tax returns. Jacqueline Gladstone was also convicted on 13 counts and Gladstone Morrison on 12 counts of aiding and assisting in the preparation and presentation of false and fraudulent tax returns. Jacqueline was convicted on three counts and Gladstone on four counts of wire fraud.
Gladstone Morrison has been in custody since the conviction. Judge McBryde ordered Jacqueline Morrison to surrender to the Bureau of Prisons on March 13, 2015.
“This office is committed to working with IRS Criminal Investigation to pursue criminals who rob the U.S. Treasury by perpetrating tax fraud schemes,” said Acting U.S. Attorney Parker. “The aggressive prosecution of these individuals is vital to maintaining public confidence in our tax system.”
R. Damon Rowe, Special Agent in Charge of the Dallas Office of IRS Criminal Investigation said, “Most Certified Public Accountants strive for the highest ethical standards; Jacqueline Morrison, however, is one CPA who did not. She and her husband, Gladstone, abused the trust their clients placed in them and their company, Jacqueline Morrison & Associates. With today’s sentences, the Morrison’s are now being held accountable for their corrupt actions.”
The government presented evidence that the Morrison’s conspired to willfully aid and assist in and advise the preparation and presentation to the IRS of false and fraudulent individual income tax returns. Many of the tax returns were false and fraudulent because to increase client refunds, the returns claimed Schedule C business losses from income for which the Morrisons knew the taxpayers were not entitled. The Morrisons and JMA tax return preparers, who the Morrisons trained, would use the substantial losses reported on the false Schedules C to offset wage income, resulting in clients recovering all or most of their tax withholding. The Morrisons benefitted from this practice by charging higher fees for additional schedules, creating client loyalty and increasing their business through client referrals.
As part of the conspiracy, the Morrisons, according to evidence presented, developed a series of forms for the client to sign at the time the return was prepared. These forms were intended to protect the Morrisons by placing all the responsibility for any false information on the client, no matter how transparently implausible or unsubstantiated the information on the return.
During the time of the conspiracy, the Morrisons collected more than $2 million in fees from clients. They also attempted to profit by using JMA’s fraud to build a large client list, which they then leveraged into a lucrative franchise agreement with Express Tax Services, a subsidiary of H&R Block. However, after they entered the franchise agreement, the IRS terminated the Morrisons’ Electronic Filing Identification Numbers (EFINs) because of their fraudulent activities. To conceal that fact and perpetuate the continuation of the franchise agreement, the Morrisons provided Express Tax Services EFINs that belonged to a business associate.
Regarding the wire fraud offenses that occurred during the time of the conspiracy, the government presented evidence that the franchise agreement provided for the payment of $750,000 from Express Tax to the Morrisons. To secure the agreement, the Morrisons falsely represented to Express Tax that JMA was not under investigation, when in fact, they well knew JMA was the subject of a federal criminal investigation by IRS-Criminal Investigation.
Unbeknownst to Express Tax, the Morrisons entered into a separate agreement to sell JMA to an individual named V.H. Gladstone Morrison misled V.H. about the true nature of JMA’s relationship with Express Tax by telling V.H. that the arrangement was nothing more than a “co-branding” or “co-marketing” agreement.” Gladstone Morrison also tried to prevent Express Tax from learning they had executed an agreement to sell JMA to V.H. by falsely telling Express Tax that V.H. was only the Morrison’ office manager. By entering into parallel agreements with separate entities — Express Tax and V.H., the Morrisons received payments from both entities for the same asset.
When the Morrison’s agreements with both Express Tax and V.H. fell apart, they again tried to profit by selling JMA to RealTex Ventures LLC, owned by “D.A.” for $425,000. Again, the Morrisons represented that JMA was not under investigation, when it was.
The case was investigated by IRS Criminal Investigation. Assistant U.S. Attorneys Douglas Allen and Chris Wolfe prosecuted.