Three Return Preparers Indicted for Preparing False Tax Returns for Clients
Three tax return preparers were charged in a 31-count indictment for 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, her son, Lorenzo Wright, and Joyce Walker, were each charged with one count of conspiracy to defraud the United States, in violation of Title 18, United States Code, Section 371. Herrington was also charged with nine counts of assisting in the preparation of false tax returns, in violation of Title 26, United States Code, Section 7206(2), and two counts of failure to file personal tax returns, in violation of Title 26, United States Code, Section 7203. Wright was also charged with fifteen counts of assisting in the preparation of false tax returns. Walker was also charged with two counts of assisting in the preparation of false tax returns, and two counts of filing false personal tax returns, in violation of Title 26, United States Code, Section 7206(1).
According to the indictment, 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.
The indictment also states that 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.