Tax evasion blotter: form and dysfunction

Keep it in the dark; job change; mistrust; and other highlights of recent tax cases.

New York: Jordan Sudberg pleaded guilty to tax evasion from 2015 to 2017 in connection with false deductions.

The deductions were part of a scheme involving hundreds of business checks purported to be payments for business services, which he provided in exchange for cash to a black market money exchange network.

From at least 2015 to 2017, Sudberg conspired to evade a substantial portion of his personal income taxes. He had two S bodies through which he operated a medical practice, specializing in pain management, in locations in Manhattan, Long Island and Queens, New York. Sudberg has issued hundreds of checks made payable to various companies and falsely claiming to be payments for business services.

In fact, these companies had not provided any commercial services to the Sudberg companies. Sudberg was given cash equal to the value of the checks minus a small fee. He falsely reported to the IRS that the checks were for legitimate business expenses and claimed deductions from the amount of the checks.

His tax evasion helped support an unlicensed money services network operated by a number of conspirators. This network allowed individuals to exchange money for commercial checks like those provided by Sudberg, generating a bogus and nominally legitimate source of funds, including for drug money laundering.

The sentence is pronounced on February 23. Sudberg pleaded guilty to one count of tax evasion, punishable by up to five years in prison. He agreed to pay the IRS $ 551,660 in restitution and lose an additional $ 243,257.

Hampton, Virginia: Tax preparer Karl Burden-El Bey, aka Carl L. Burden, 66, was sentenced to 38 months in prison for preparing false returns on behalf of clients, stealing public funds and failing to file his own tax returns federal.

From at least 2013 to 2019, Burden-El Bey created false statements for clients of his tax preparation business. In customer statements, Burden-El Bey has claimed false information about dependents, residential energy credits, gifts to charity, deductions and fees for child and dependent care. to inflate federal refunds. He often hid his involvement by not signing statements as false as the preparer. He also stole $ 5,000 by depositing part of a customer’s refund without authorization into his personal bank account.

From 2013 to 2017, Burden-El Bey also failed to file his own individual federal tax returns.

He was also sentenced to serve three years of supervised release and pay some $ 5,000 in restitution to the United States.

Chesapeake, Virginia: Business owner Shane August has pleaded guilty to defrauding the IRS of more than $ 1.2 million in taxes.

From 2013 to 2017, August owned and operated a home health care business. He defrauded the IRS, among other things, hiding personal bank accounts, using undisclosed accounts to do business, maintaining a cash lifestyle to avoid the IRS, making false statements about his ability to pay, lying to IRS agents and embezzling large sums of money. pay personal expenses.

August withheld taxes on the employment of about 60 of his employees and has not consistently paid more than $ 900,000 of those withholdings to the IRS. Every year it provided fraudulent labor tax forms to its employees, who declared their own taxes and mistakenly believed that the amounts withheld from their wages had gone to Social Security.

Additionally, between 2014 and 2017, August reported personal income over $ 900,000 to the IRS, but paid no tax on that income and now owes more than $ 288,000 in personal income tax. income. Instead of paying his taxes, August used large sums of money to pay for personal expenses such as a contract to build a house and rent a luxury vehicle.

The sentence is pronounced on March 24. He faces a maximum of five years in prison.

Jefferson Parish, Louisiana: Construction company employee Randall Lackey has pleaded guilty to conspiring to defraud the IRS.

From 2011 to April 2018, Lackey conspired to defraud the IRS by concealing his own income and that of others. He worked as an employee for two commercial construction companies, SES Construction Consulting Group and Global Technical Solutions. To hide his income, Lackey charged his SES and GTS salaries to R&O Renovations and Reconstructions, a company he owned.

For the 2012 to 2017 tax years, Lackey did not file any corporate income tax returns for R&O or federal personal income tax returns. The Lackey conspirators falsely classified Lackey as a subcontractor to SES and GTS rather than an employee. As a result, Lackey had no taxes withheld from his paycheck and SES and GTS avoided paying employment taxes on his salary. Lackey and other members of the conspiracy also hired workers who did not have the proper papers and were not allowed to work in the United States, and then paid them in cash.

Sentencing is set for March 16. He faces up to five years in prison, as well as a period of supervised release, restitution and financial penalties. Other members of the conspiracy have all pleaded guilty to conspiring to defraud the IRS; they risk conviction in early 2022.

Belle Glade, Florida: Tax preparer Fred Pickett Jr., 54, has been convicted of preparing false returns for his clients.

Pickett owned and operated a tax return preparation business which he used to prepare false personal income tax returns. From 2013 to 2016, he created statements for some of his clients claiming that they owned shell businesses that were losing tens of thousands of dollars every year.

Pickett was convicted of 22 counts of assisting and assisting in the preparation of false statements. The sentence is passed on March 8 when he faces up to three years in prison for each count.

Milledgeville, Georgia: Iran V. Backstrom, aka Shariyf Noble, has pleaded guilty to conspiring to defraud the United States by promoting nationwide tax evasion to more than 200 participants in at least 19 states. He also pleaded guilty to helping others prepare and file false statements for those recruited under the program.

Backstrom was the main promoter of the scheme, which involved recruiting clients and preparing false statements on their behalf by convincing them that their mortgages and other debts qualified them for tax refunds. Between 2014 and 2016, Backstrom and his conspirators held seminars across the county to raise awareness of the program.

He helped prepare and file returns for participants, who collectively requested more than $ 25 million in federal reimbursements. These tax returns incorrectly claimed that banks and other financial institutions withheld large sums of income tax from participants, entitling customers to a refund. Financial institutions did not pay any income or withhold taxes to these individuals.

To make the refund claims appear legitimate, Backstrom and his conspirators filed tax documents with the IRS that matched the withholding information on the returns, making them appear as if they had been issued by the banks.

Backstrom admitted to giving orders to others as part of the scheme. Several of his conspirators had previously pleaded guilty for their role in the scheme. Backstrom also admitted that he and his conspirators covered up their roles in the scheme by stating, among other things, that the false tax returns were “self-prepared,” by submitting bogus IRS forms designed to appear as if they had were created by the finances of the participants. institutions and coach participants on how to conceal the system from the IRS.

Backstrom further admitted that he and his conspirators charged participants between $ 10,000 and $ 15,000 in fees for preparing each statement. Although Backstrom personally received around $ 1 million for his role in the scheme, he did not file tax returns for the years 2014, 2015, and 2016 to report this income.

He faces a maximum of five years in prison for conspiring to defraud the United States and three years in prison on each of the seven counts of aiding and assisting in preparing and filing a bogus declaration. He also faces a period of supervised release, restitution and financial penalties.

This was the third such case in recent weeks.

Comments are closed.