Tax Preparer Found Guilty In Manhattan Federal Court On All Counts Relating To False Tax Returns And Aggravated Identity Theft

Preet Bharara, the United States Attorney for the Southern District of New York, and Toni Weirauch, the Special Agent-in-Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced that MAHAMADOU DAFFE, a tax preparer, was found guilty Friday, January 10, 2014, by a jury in Manhattan federal court of conspiracy to steal government funds, theft of government funds, conspiracy to file false claims, wire fraud, and aggravated identity theft in connection with the preparation and filing of nearly 1,000 false tax returns submitted online using stolen identities. DAFFE was also convicted of conspiracy to steal government funds, theft of government funds, and conspiracy to file false claims in connection with his use of stolen children’s identities to claim false dependents on his clients’ income tax returns. The investigation that led to DAFFE’s arrest and his conviction last week was undertaken by the Criminal Investigation Unit of the Internal Revenue Service (“IRS”), which lost more than $1.5 million as a result of DAFFE’s crimes, during which he attempted to steal more than $4.5 million from the Government. DAFFE was convicted after a one-week trial before U.S. District Judge Naomi Reice Buchwald.

According to the Indictment, as well as evidence presented at DAFFE’s trial:

From 2008 through January 2013, DAFFE engaged in two separate schemes to defraud the IRS. DAFFE filed false tax returns for his tax preparation clients, in which he caused those clients to claim as dependents children who were in fact total strangers to them, and whose identities DAFFE stole. In exchange, DAFFE collected $1,000 per return.

In another scheme, during the same time frame, DAFFE used stolen identities to file hundreds of false tax returns, supported by bogus Forms W-2, through an online tax preparation service intended for use by individual taxpayers. He then funneled the resulting refunds into several bank accounts he controlled—accounts in his own name, the names of co-conspirators, and the names of aliases DAFFE used.

DAFFE, 31, of Queens, New York, was convicted of eight counts relating to theft of government funds, filing false returns, wire fraud, and aggravated identity theft. Each of the counts charging conspiracy to steal government funds carries a maximum penalty of five years in prison and a fine of $250,000, or twice the gross gain or loss from the offense. Each of the counts charging substantive theft of government funds carries a maximum penalty of 10 years in prison and a fine of $250,000, or twice the gross gain or loss from the offense. Each of the false claims conspiracy counts carries a maximum penalty of 10 years in prison and a fine of $250,000, or twice the gross gain or loss from the offense. The conspiracy to commit wire fraud count carries a maximum penalty of 20 years in prison and a fine of $250,000, or twice the gross gain or loss from the offense. The aggravated identity theft count of which DAFFE was convicted carries a mandatory minimum term of imprisonment of two years, to be served consecutively to any other sentence imposed, as well as a maximum fine of $250,000, or twice the gross gain or loss from the offense. DAFFE is scheduled to be sentenced by Judge Buchwald on April 24, 2014, at 3:00 p.m.

DAFFE’s co-conspirator, Mohamed Sangare, previously pled guilty to similar counts and is awaiting sentencing.

Mr. Bharara praised the investigative work of the IRS-CI and thanked the IRS. He noted that the investigation is continuing.

This case is being handled by the Office’s General Crimes Section. Assistant U.S. Attorneys Carolina A. Fornos and Sarah E. McCallum are in charge of the prosecution.

U.S. v. Mahamadou Daffee Indictment S1