Certified Public Accountant Pleads Guilty to Using Her Tax Preparation Business to Facilitate an Income Tax Refund Fraud Scheme
A Certified Public Account (CPA) pled guilty today to using her tax preparation business to facilitate an income tax refund fraud scheme.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), made the announcement.
Pamella B. Watson, 60, of Davie, pled guilty to one count of wire fraud, in violation of Title 18, United States Code, Section 1343. At sentencing, the defendant faces a maximum statutory sentence of twenty years in prison.
According to court documents, Watson operated Watson & Associates Business Services, Inc., a tax preparation business in Miami. Defendant Watson prepared the client’s tax return and provided them a copy showing a refund amount and/or an amount payable to the IRS. Without the client’s knowledge or authorization, the figures on the return were changed, and a tax return showing a higher refund amount was filed with the IRS. The client’s bank account received the refund amount reflected on the copy they received from defendant Watson, and the remainder of the tax refund was deposited into an account controlled by Watson. The client did not have any knowledge of the refund falsification and splitting.
Court documents state that Watson prepared approximately 557 U.S. Individual Income Tax Returns (Forms 1040) for tax years 2010 through 2013 for her clients. Approximately 395 (71%) had refunds split into an account controlled by defendant Watson, or the entire refund diverted into Watson’s bank account. From approximately January 2011 through September 2014, defendant Watson deposited $3,405,479.20 of client tax refunds from 183 individual taxpayers into accounts she controlled.
According to court documents, Watson also diverted checks totaling $222,676 into her personal IRS account, and an additional $56,766 in IRS payments from Watson’s clients was applied to an associate’s tax account. These checks were generated by clients who were informed by defendant Watson that they were paying their own tax liability.
Watson is scheduled to be sentenced on December 4, 2015 at 9:00 a.m. before Judge James I. Cohn.
Mr. Ferrer commended the investigative efforts of IRS-CI. The case is being prosecuted by Senior Litigation Counsel Neil Karadbil.