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Press Release
CHARLOTTE, N.C. - With the deadline for filing income tax returns approaching next month, Jill Westmoreland Rose, Acting U.S. Attorney for the Western District of North Carolina, and Thomas J. Holloman, III, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI), jointly announce recent tax fraud prosecutions and deliver a powerful warning to potential tax cheats.
“As tax filing season reaches its peak, would-be tax fraudsters are warned that our office will prosecute those who try to cheat the tax system,” said Acting U.S. Attorney Rose. Rose noted the importance of deterring others from committing tax crimes and stated, “Our tax system is built on voluntary compliance and tax criminals who do not pay their fair share increase the tax burden on honest taxpayers.”
“Filing a truthful, accurate tax return is a responsibility that tax preparers should take very seriously, said Thomas J. Holloman, III, Special Agent in Charge, IRS Criminal Investigation. “Let the message to unscrupulous tax return preparers be clear, that criminal activity and greed carry severe consequences. I encourage citizens to avoid being taken advantage of, by seeking out credentialed, reputable tax preparers during the current filing season, also to take the appropriate measures to safeguard their personal information, so as not to fall victim to identity theft.”
On Wednesday, March 18, 2015, Fitzroy Lawrence, a Charlotte tax return preparer, was indicted on federal charges for preparing false tax returns by making false claims for refund from the IRS. According to the indictment, for tax years 2008 through 2011, Lawrence aided and assisted in the preparation of hundreds of tax returns that were filed with the IRS, seeking fraudulent tax refunds totaling millions of dollars. Many of the fraudulent tax returns included false wages and false dependent information. Lawrence was charged with 15 counts of making false claims for refund and faces a maximum sentence of five years in prison and a $250,000 fine per count. The charges against Lawrence are allegations and he is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Prosecutions of Tax Evasion and Filing False Tax Returns
Over the last year, the U.S. Attorney’s Office has prosecuted and convicted a number of individuals for omitting income from their individual tax returns. For example, Mark Tuan Le (3:14-cr-00110), an internal medicine physician, pleaded guilty to tax evasion for hiding millions of dollars in personal income from the IRS by claiming fraudulent business expenses for funds that were used to purchase and construct a $2.4 million, 8000-square foot residence on Lake Norman in Cornelius. Plea documents indicate that Le omitted to report approximately $1.2 million of income per year for 2009 and 2010. Le, who also pleaded guilty to healthcare fraud charges, is awaiting sentencing.
During the past year, defendants have received substantial sentences for tax charges, ranging from home confinement to several years in prison. The following individuals were among the defendants sentenced for lying to the IRS about their taxable income:
Prosecutions of Fraudulent Tax Return Preparers
In 2014, the U.S. Attorney’s Office also prosecuted unscrupulous tax return preparers. The following defendants are among those prosecuted federally for tax return preparer fraud:
Prosecutions of Stolen Identity Refund Fraud
In addition to prosecuting tax evaders and fraudulent tax return preparers, the U.S. Attorney’s Office prosecuted individuals for stealing the identities of taxpayers and filing fraudulent tax returns. Jacquline Juarez (3:13-cr-00157), was sentenced to 18 months in prison and ordered to pay restitution of more than $1 million for her role in a fraudulent tax refund scheme involving the use of fraudulent IRS Individual Taxpayer Identification Numbers (ITIN) to obtain false tax refunds.
Federal penalties for each count of conviction of tax crimes range from a maximum of one year in prison and a $100,000 fine for failure to file a tax return, false withholding exemptions, and delivering or disclosing false tax documents, to a maximum of 10 years in prison and a $250,000 fine for conspiracy to defraud with respect to false refund claims. Other penalties include a mandatory term of two years in prison and a $250,000 fine for aggravated identity theft charges, three years in prison and a $250,000 fine for obstructing or impeding an investigation and filing or preparing a false tax return, and a maximum of five years in prison and a $250,000 fine for tax evasion, failure to pay taxes, conspiracy to commit a tax offense or conspiracy to defraud.
The U.S. Attorney’s Office and the IRS remind tax payers to exercise caution during tax season to protect themselves against a wide range of tax schemes ranging from identity theft to return preparer fraud. The IRS has issued its annual “Dirty Dozen” which lists common tax scams that taxpayers may encounter, particularly during filing season. Taxpayers are urged look out for, and to avoid, the following common schemes:
Education is the best way to avoid these common schemes.To learn more about the Dirty Dozen scams and for help with recognizing and avoiding abusive tax schemes, the IRS offers educational material at www.irs.gov. Suspected tax fraud can be reported to the IRS using Form 3949-A found on the IRS.gov website.