Bronx Attorney Pleads Guilty In Manhattan Federal Court To Preparing Fraudulent Tax Returns For Clients
Preet Bharara, the United States Attorney for the Southern District of New York, and Caroline D. Ciraolo, the Principal Deputy Assistant Attorney General for the Tax Division of the Department of Justice, announced that WILLIAM DOONAN, an attorney who operated a tax preparation business in the Bronx, New York, pled guilty today in Manhattan federal court to charges related to his participation in filing fraudulent tax returns, falsely claiming more than $6 million in deductions. DOONAN pled guilty today before U.S. Magistrate Judge Andrew J. Peck.
Manhattan U.S. Attorney Preet Bharara said: “William Doonan used his law degree and tax preparation business to fleece the IRS out of millions of dollars in fraudulent tax deductions. As he admitted today, Doonan claimed numerous false deductions for thousands of clients, defrauding the IRS and unlawfully depriving the public of tax revenue.”
Principal Deputy Assistant Attorney General Caroline D. Ciraolo said: “William Doonan used his law practice to prepare thousands of false tax returns each year with phony deductions, costing the U.S. treasury more than $1.5 million. His conviction sends a clear message – we will fully prosecute crooked tax preparers – whether they be lawyers and tax professionals or temporary storefront operators.”
According to the allegations contained in the Information filed in Manhattan federal court and statements made during the plea proceeding:
Since at least 2009, DOONAN has been in the business of preparing federal tax returns for clients in exchange for fees. DOONAN, a New York licensed attorney since 1982, carried out his tax preparation business in the Bronx using the firm name “William Doonan, Esq.” DOONAN prepared and filed more than 3,000 federal tax returns with the Internal Revenue Service (“IRS”) each year and regularly prepared and filed client returns that were false and fraudulent. For example, on some of his clients’ returns, DOONAN added false medical and dental expenses, state and local taxes, home mortgage interest, gifts to charity, job expenses, and certain miscellaneous deductions. DOONAN also attached Schedules C to his clients’ returns that reported “consulting” businesses that the relevant clients did not own, operate, or materially participate in, and business losses that the relevant clients did not incur. Between tax years 2009 through tax year 2012, DOONAN included in excess of $6 million in these fabricated and inflated items on his clients’ federal tax returns.
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DOONAN, 69, of the Bronx, New York, pled guilty to one count of aiding and assisting in the preparation of a false tax return, and one count of obstructing and impeding the due administration of internal revenue laws. Each charge carries a maximum sentence of three years in prison. As part of his plea, DOONAN agreed that he caused a tax loss of between $1.5 and $3.5 million, and has agreed to pay $65,820 in restitution to the IRS.
DOONAN is scheduled to be sentenced by U.S. District Judge Vernon S. Broderick on February 10, 2017, at 11:00 a.m. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Bharara and Ms. Ciraolo praised the outstanding efforts of the IRS-CI in the investigation. This case is being prosecuted by the U.S. Attorney’s Office’s Complex Frauds and Cybercrime Unit. Special Assistant United States Attorney Jorge Almonte (of the Tax Division) is in charge of the prosecution.