Tax Preparer Admits Conspiring To Commit Tax Fraud
NEWARK, N.J. – An Essex County, New Jersey, tax preparer today admitted her role in conspiring to defraud the IRS and filing false personal tax returns for a New Jersey business owner and two other individuals, U.S. Attorney Craig Carpenito announced.
Zenobia Williams, 52, of Maplewood, New Jersey, pleaded guilty before U.S. District Judge Kevin McNulty in Newark federal court to one count of conspiring to defraud the IRS by reporting false business expenses on the business owner’s tax return to fraudulently reduce his tax liability and by reporting those sham expenses as income on two other individuals’ tax returns to obtain unwarranted refunds for them.
According to documents filed in this case and statements made in court:
In 2016, Williams operated Maplewood Business Services LLC, a tax preparation business in Maplewood. Williams and the New Jersey business owner agreed to report false labor expenses for his business on his personal tax return for calendar year 2015 to decrease his tax liability.
On January 5, 2016, Williams sent the business owner a text message, stating, “Hey Fella, I have 1 client right now that needs 15,750 in income. I need you to produce a 1099MISC form for that person. I will give you the information. Let me know how much more income you need to 1099.” Subsequently, at the business owner’s direction, Williams prepared two IRS Forms 1099 which falsely stated that, in 2015, his business paid one individual compensation of $15,800 and another individual compensation of $11,255, when both Williams and the business owner knew that no such compensation had been paid to those individuals.
Williams also prepared a personal tax return for the business owner which falsely reported the phony business expenses totaling $27,055, which both Williams and the business owner knew would fraudulently decrease the amount of tax that the business owner owed the IRS for calendar year 2015. Williams also reported the bogus business expenses as income on the tax returns of the two individuals referred to above, which resulted in both receiving unwarranted tax refunds from the IRS.
The tax fraud conspiracy charge to which Williams pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing of the defendant is scheduled for April 17, 2020.
U.S. Attorney Carpenito credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge John R. Tafur; special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark; and special agents of the U.S. Department of Housing and Urban Development, Office of Inspector General, under the direction of Special Agent in Charge Christina Scaringi, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorneys Cari Fais and J Imbert of the U.S. Attorney’s Office’s Special Prosecutions Division.
Defense counsel: Kenneth W. Kayser, Esq., East Hanover, New Jersey