Owner Of Tax Preparation Business Pleads Guilty To Tax Fraud
James L. Porter, Acting United States Attorney for the Southern District of Illinois, announced today that Eyob Tilahun, 30, of St. Louis, MO, formerly the owner of a local tax return preparation business known as "Tax King," pled guilty to a charge of conspiring to submit false claims to the United States Government.
Tilahun owned and operated several Tax King locations in St. Louis, Missouri, and one in East St. Louis, Illinois. In the pleading guilty today, Tilahun admitted that Tax King’s return preparers were trained and instructed to increase their customers’ refunds by falsifying certain information on their tax returns. The false information that was placed on the returns included: (1) false Business Income and Schedules Cs which caused the clients to qualify for larger Earned Income Credits ("EICs"); (2) false wages, which again caused the clients to qualify for larger EICs; (3) false education expenses which enabled the clients to qualify for American opportunity education credits; and (4) false information regarding fuel taxes which qualified the clients for federal fuel tax credits.
Tilahun admitted that he profited from the scheme by charging Tax King’s clients fees which ranged from approximately $400 to $650. The indictment in the case alleges that the return preparers also profited by requesting cash "tips" from the clients that ranged from approximately $100 to $1,000.
"Tilahun and his business, Tax King, caused money to be stolen money from all Americans," Acting United States Attorney Porter stated. "Theft from our citizens, whether done by a gun or a computer, is simply unacceptable. Our office will continue all efforts to bring to justice those who cheat the American public."
"While most return preparers provide excellent service to their clients, a few unscrupulous tax preparers file false and fraudulent returns to defraud the government, the tax-paying public and their own clients," said Karl Stiften, Special Agent in Charge of IRS Criminal Investigation. "Taxpayers should be careful in selecting the tax professional who will prepare their returns."
The sentencing hearing for Tilahun is set for August 26, 2016, at 10:00 a.m. The charge of conspiring to submit false claims carries a maximum sentence of 10 years in federal prison, up to a $250,000 fine, and restitution.
Four other defendants in the case have previously pled guilty. On April 29, 2016, Mason B. Richmond, 31, of St. Louis, MO, and Lakesha R. Wilson, 28, of East St. Louis, IL, both pled guilty in to conspiring to submit false claims and related tax charges. Richmond worked as a return preparer at Tax King location at 900 N. Grand in St. Louis. Wilson worked as a return preparer at the East St. Louis, IL, Tax King. Wilson is scheduled to be sentenced on August 5, 2016, and Richmond’s sentencing is set for August 12, 2015. Tanesa L. Beverly, 32, of Belleville, IL, and Melissa L. Wiley, 34, of Granite City, IL, both pled guilty in May 2015. Both Beverly and Wiley were return preparers at the East St. Louis Tax King. Beverly and Wiley are scheduled to be sentenced on September 9, 2016.
Charges are still pending against two additional return preparers from the East St. Louis location. The trial of Edric A. Russell, 35, and Pierre J. Carter, 33, both of East St. Louis, is scheduled to begin on August 22, 2016, at the Federal Courthouse in East St. Louis. As to those defendants, the public is reminded that they are presumed innocent of the charges until proven guilty beyond a reasonable doubt.
The investigation is being conducted by agents from the Fairview Heights, Illinois, and St. Louis, Missouri Offices of the Internal Revenue Service – Criminal Investigations. The case is being prosecuted by Assistant United States Attorney Scott A. Verseman.
The prosecution of this case is being coordinated with the United States Attorney’s Office for the Eastern District of Missouri. Several of the return preparers from the St. Louis locations of Tax King have been charged in federal court in St. Louis.