Three Delray Beach Return Preparers Plead Guilty to Preparing False Tax Returns for Clients
Three Delray Beach tax return preparers pled guilty to unlawfully enriching themselves by submitting false federal income tax returns to the Internal Revenue Service (IRS) on behalf of their clients.
Wifredo A. Ferrer, U.S. 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.
Devonne Herrington, 64, her son, Lorenzo Wright, 49, and co-defendant Joyce Walker, 61, all of Delray Beach, pled guilty to one count of conspiracy to defraud the United States, in violation of Title 18, United States Code, Section 371. Herrington also pled guilty to one count of failure to file personal tax returns, in violation of Title 26, United States Code, Section 7203. Walker also pled guilty to one count of filing false personal tax returns, in violation of Title 26, United States Code, Section 7206(1).
Walker is scheduled to be sentenced on January 27, 2017, and Herrington and Wright are scheduled to be sentenced on February 17, 2017, all before United States District Judge Robin L. Rosenberg. At sentencing, the defendants face up to five years in prison for the conspiracy charge. Walker also faces up to three years in prison for filing false tax returns. Herrington also faces up to one year in prison for the failure to file tax returns charge.
According to court documents, Herrington established and operated a tax preparation business in Delray Beach, Florida, that was initially known as Devonne's LLC and later known as Wright's & Family LLC. Herrington hired tax preparers, including her son, Wright, and co-defendant Walker, to assist her with preparing tax returns for her clients. Herrington, Wright and Walker met with clients in person at the tax preparation office in order to conduct a cursory interview and collect required tax forms.
Although the clients did not claim to be eligible for, or provide documents in support of, certain tax credits or income deductions, the defendants prepared tax returns which falsely stated that the clients were eligible for such credits and deductions. The tax credits falsely claimed by the defendants included credits for first time home purchasers and education expenses. The income deductions falsely claimed by the defendants included deductions for business expenses and for being the head of household. These false and fraudulent credits and deductions reduced the clients' tax liability and increased their tax refunds.
The defendants claimed the false tax credits and deductions on IRS schedules and forms which were included in the clients' tax returns. Herrington, Wright, and Walker charged the clients extra fees for these additional fraudulent schedules. In most instances, the defendants did not review the returns with the clients prior to filing them with the IRS and did not provide copies of the returns to the clients.
Many clients have since been audited by the IRS and now have to pay back the refunds they received as a result of the fraudulent credits and deductions added to their tax returns by the defendants.
Herrington did not file her personal income tax returns for calendar years 2010 and 2011. In addition, Walker filed her personal income tax returns for calendar years 2010 and 2011 containing false claims for the Education Expense Credit.
Mr. Ferrer commended the investigative efforts of IRS-CI. The case is being prosecuted by Assistant U.S. Attorney Ellen L. Cohen.