Tax Fraud Blotter: Energetic crooks
Riviera rip-off; questionable deductions; fled the country; and other highlights of recent tax cases.
Montgomery, Alabama: Tax preparer Lashunda Deann Crittenden has pleaded guilty to aiding and assisting in the preparation of false income tax returns.
Crittenden operated a prep service where she prepared federal income tax returns for others. She admitted that on Feb. 26, 2018, she electronically transmitted a return prepared by her that claimed that a client had incurred $8,726 in qualified solar electric property costs, $6,358 in medical and dental expenses, and $8,364 in gifts to charity despite knowing that the client was not entitled to claim these items.
Crittenden faces up to three years in prison for each count, as well as fines and restitution to the IRS.
Acton, Massachusetts: Christopher N. Condron has been convicted of conspiracy to defraud the U.S. and three counts of wire fraud in connection with his role in a scheme to defraud the Treasury of more than $50 million in tax-free energy grants.
In August 2017, Condron was indicted along with his partner, Jessica Metivier, for conspiring to submit fraudulent applications to the Treasury for energy grants available as part of the American Recovery and Reinvestment Act of 2009. The act provided tax-free grants to individuals and businesses who put certain “specified energy property” — such as wind farms and gasification systems that convert trash into electricity — into service in a trade or business.
From May 2009 to June 2013, Condron and Metivier submitted fraudulent grant applications to the Treasury on behalf of four Massachusetts companies. For each of the applications, Condron and Metivier falsely claimed that Metivier and her entities had acquired, placed into service or started construction of energy property, which included three different bio-fuel gasification systems purportedly built at a cost of approximately $88 million, and an $84 million wind farm project. Condron and Metivier sought to be reimbursed more than $50 million based on those phony costs.
Evidence showed that Condron vastly overstated property costs in the grant applications and as a result, defrauded the government out of more than $8.7 million. Further evidence showed that Condron attempted to obtain another $17 million in energy grants.
In February, Metivier was sentenced to a year of probation.
Condron’s sentencing is Feb. 4. Conspiracy to defraud the United States with respect to claims provides for up to 10 years in prison; wire fraud provides for up to 20 years in prison. Both crimes also carry three years of supervised release and a fine of $250,000 or twice the gross gain or loss, whichever is greater.
Portland, Oregon: Kory Merrill Tarpenning, an American expatriate residing in the Principality of Monaco, has pleaded guilty to filing a false return.
Tarpenning is a marketing consultant and owner of numerous foreign businesses organized in France and Monaco. His primary line of business is as a brand consultant to U.S. companies interested in expanding operations to Monaco. Tarpenning also owns several Monegasque consulting companies, including Sirius Group SAM and Sirius Sports Marketing.
In 2014, Tarpenning arranged a sponsorship between Association Sportive de Monaco Football Club SA (AS Monaco), a Monegasque professional soccer club, and Nike European Operations. The agreement was valued at as much as 20 million euros over its five-year term. Subsequently, AS Monaco executed a contract with Sirius Group to pay Tarpenning a 9% commission on cash payments from Nike and a 6% commission on athletic wear ordered by the team. Between 2014 and 2018, AS Monaco paid Tarpenning at least 2.1 million euros.
Tarpenning transferred the income from deals with AS Monaco and other companies to joint personal bank accounts in Monaco and the U.S. He used the proceeds to purchase a second home in Eugene, Oregon, and to pay for his children’s Monegasque private school. In tax years 2014 through 2018, he failed to report more than $1.4 million in wages and business income.
During this time, he also failed to report substantial dividend income from other unrelated business ventures, including companies he owned that operated the Nike Store and Starbucks Coffee in Monaco and a brand consulting firm based in Portland. In tax years 2014 through 2018, Tarpenning failed to report more than $1 million in dividend income.
Altogether, from 2014 to 2018, his underreporting of income caused a federal tax loss of more than $670,000.
Sentencing is Jan. 6. He faces a maximum of three years in prison; a $250,000 fine or twice the gross gains or losses resulting from his offense, whichever is greater; and a year of supervised release. He has agreed to pay $670,851 in restitution to the IRS.
Denver: Tax preparer Jimmie Lucero has pleaded guilty to aiding and assisting in the preparation of false and fraudulent federal income tax returns.
Lucero, owner of DBA Lucero Tax and Accounting, was involved in a scheme that featured a high percentage of returns with questionable deductions for the years 2014 to 2017. Investigation revealed that Lucero inflated or fabricated unreimbursed employee business expenses and charitable contributions for some of his clients.
He has agreed to pay restitution to the IRS; the estimated total restitution amount for which Lucero is liable is $233,531.
Sentencing is Feb. 3, when he also faces up to three years in prison, a fine of up to $250,000 and up to three years of supervised release.
Oakland, California: Restaurateur Chaturonk Ngamary Jr., one of the owners and operators of multiple Thai Original BBQ restaurants in California, has been sentenced to two years in prison.
From 2011 through 2016, Ngamary Jr. failed to report more than $7.5 million in sales to the California Department of Tax and Fee Administration and more than $2.9 million in wages to the state Employment Development Department.
His sentence will be suspended if he successfully completes two years of probation, including 180 days on work release. Ngamary Jr., who pleaded guilty in 2020, has paid $1,540,962.02 in restitution to the two California agencies and to multiple insurance carriers. The restitution includes total sales and payroll tax liability, unpaid workers’ compensation insurance premiums, the cost of the investigation and interest on unpaid tax liabilities.
In December 2019, Ngamary Jr. and Chaturonk Ngamary Sr., his father, were charged with evading the payment and reporting of $977,836.36 in sales tax, payroll tax and workers’ compensation insurance premiums.
Sanjutha Hantanachaikul, owner and operator of one Thai Original BBQ restaurant, was also charged with nine counts of evading the payment and reporting of $3,575.82 in payroll tax and workers’ compensation insurance premiums. In August 2020, Hantanachaikul pleaded guilty to filing a false return and was sentenced to three years of probation. She also paid $6,751.29 in restitution, which included the total payroll tax liability, interest on the unpaid tax liability and workers’ compensation insurance premiums.
Ngamary Sr., who co-owned the restaurant with his son, has fled the country and currently resides in Thailand.
Montgomery, Alabama: Tax preparer Alisaya Danita Thompson-Dixon has entered a guilty plea for her role in filing false returns.
Thompson-Dixon operated a tax prep business under the name Magic Tax Service. She admitted to assisting in filing false tax returns on at least two occasions.
In February 2016, Thompson-Dixon aided a client in a return that falsely claimed business income of $2,150 while claiming expenses of $67,107. Thompson-Dixon knew the client was not entitled to claim any business income or expenses and this deception resulted in a federal tax loss of $11,294.
She also admitted to facilitating an illegal return in January 2018. In similar fashion, she claimed false business revenue and expenses for a client that resulted in a tax loss of $10,499.
She faces up to three years in prison for each count, along with fines and restitution.