Tax Fraud Blotter: What a gas
An Audi, a Porsche and a sentence; Stop and gone; bad Company; and other highlights of recent tax cases.
Surprise, Arizona: Anthony Henry Williams, 52, has been sentenced to four years in prison after being convicted of 17 counts including conspiracy, false claims to the IRS and transactional money laundering.
In 2018 and 2019, Williams submitted seven false federal returns claiming more than $3 million in refunds. The IRS processed one of these returns that resulted in an unwarranted $600,000 refund to Williams.
The IRS later advised him that the return was fraudulent and that he needed to return the money. Williams instead purchased two luxury vehicles and a home, among other expenditures.
His co-defendant Shakina Williams pleaded guilty and was sentenced to time served followed by a year of supervised release for her role in the offense. Both defendants were ordered to pay almost $600,000 in restitution and were ordered to forfeit their interests in an area home, an Audi A7 and a Porsche Panamera.
Largo, Maryland: Tax preparer Ronald Eugene Watson, a.k.a. Sabir Muhammad, 59, of Brandywine, Maryland, has been convicted on 23 counts of aiding and assisting in the preparation of false returns.
Watson was a self-employed tax preparer operating SW Accounting Associates and from at least 2015 to at least 2017 he prepared and e-filed fraudulent 1040s and Schedules A and C for clients.
Watson included inflated and fictitious deductions and fraudulent business profits and losses to obtain larger, undeserved refunds. He varied his prep fees depending on the amount of the refund requested, with fees typically ranging from some $500 to some $1,500.
Watson faces a maximum of three years in prison for each of the counts. Sentencing is June 13.
Baker, Louisiana: Tax preparer Bridget Rogers White, 48, has been sentenced to two years in prison following her conviction for aiding and assisting in the preparation and presentation of false and fraudulent returns.
She operated a prep business sometimes referred to as Bridget Stop & Go Tax Services or Bridgett’s Tax Service, out of her residence. White prepared returns for money but did not identify herself as the paid preparer on the returns.
From January 2015 through at least June 2018, she prepared and submitted numerous false 1040s for herself and other clients, routinely including a false Schedule C and a false Form 8863 to claim the American Opportunity Credit. On certain returns, White included additional false items, such as fraudulent itemized deductions on a Schedule A or false dependents.
The IRS identified 31 false 1040s that White prepared and submitted for 13 clients for 2014 through 2017; those returns alone caused an actual loss of $149,993. White further admitted that the total tax loss attributable to her conduct exceeded $550,000.
She was also ordered to serve a year of supervised release following her term of imprisonment and to pay $149,933 in restitution.
Thibodaux, Louisiana: Businessman Cornel Martin Sr. has pleaded guilty to failing to account for and pay over federal income taxes and FICA taxes.
He operated several area businesses that provided temporary labor to shipyards and offshore oil rigs. Martin was the sole owner of each of the companies and controlled the companies’ finances. From 2012 to 2021, his businesses withheld taxes from its employees’ paychecks but Martin failed to pay over the withheld taxes to the IRS, resulting in a federal tax loss of $1.5 million to $3.5 million.
He faces up to five years in prison as well as a term of supervised release of up to three years. He also faces a fine of $250,000 or the greater of twice the gross gain to the defendant or twice the gross loss, as well as payment of a mandatory $100 special assessment fee. Sentencing is June 15.
San Antonio: Tax preparer Eden Garza, 43, has been sentenced to a year and a day in prison for preparing false returns.
He prepared numerous false income tax returns for clients between tax years 2014 and 2019. IRS investigators determined that Garza aided and assisted in the preparation of 49 false returns by falsifying filing statuses, itemized deductions, income and expenses and residential energy credits. The fraudulent refunds resulted in a tax loss of $255,967. Investigation also revealed that Garza had received a prep fee from his clients, usually 10% of the refund.
He was also ordered to serve a year of supervised release and pay $255,967 in restitution.
Bluffton, South Carolina: Resident Michael Sturms has been sentenced to five years of probation and ordered to pay $3,097,582 in restitution to the IRS after pleading guilty to tax evasion.
Sturms failed to timely file federal individual income tax returns for tax years 2007 through 2012 and he only filed these delinquent returns in 2014 as part of divorce proceedings from his then-wife. Sturms signed each of these late filed returns, admitting to a significant tax deficiency.
In 2015, the IRS filed federal tax liens in South Carolina and Florida against Sturms and his business entities for taxes owed. In March 2015, the IRS sent Sturms a final notice of intent to levy for $2,368,409.94, which included the taxes, penalties and interest he then owed.
To evade payment of income tax, he engaged in financial transactions designed to hide funds that he received from a large breach-of-contract settlement. These efforts included his creation of a new business checking account in the name of Worldwide Financials to deposit $1,181,321.64 of settlement money, a failed attempt to withdraw $1 million in cash from this account and the transfer of $550,000 of these proceeds to his new wife, which then was used to purchase a residence lien-free in his new wife’s name.
Naples, Florida: Gas company exec Mark Anthony Gyetvay has been found guilty of failing to file an FBAR, making a false statement to the IRS and failing to file tax returns.
From 2005 to 2015, Gyetvay concealed his ownership and control over substantial offshore assets and failed to file and pay taxes on millions in income.
After working as a CPA in the U.S. and Russia, Gyetvay became the CFO of Novatek, a large Russian gas company. Beginning in 2005, he opened two accounts in Switzerland to hold substantial assets, which at one point had an aggregate value of more than $93 million.
Over several years, Gyetvay took steps to conceal his ownership and control over these funds, including removing himself from the accounts and making his then-wife, a Russian citizen, the beneficial owner of the accounts. Additionally, he did not file his 2013 and 2014 U.S. returns.
Gyetvay also did not file FBARs to disclose his control over the Swiss accounts, at times rejecting his accountant’s recommendation to do so. In an unsuccessful attempt to avoid significant penalties, Gyetvay made a false filing with the IRS using the Streamlined Foreign Offshore Procedures.
Sentencing is Sept. 21. He faces a maximum of five years in prison for failing to file an FBAR, five years for making a false statement and one year for each willful failure to file a return.
Corpus Christi, Texas: Tax preparer Berlinda Luikens has admitted preparing false and fraudulent returns.
Luikens was owner and operator of the prep business Tax Company. She admitted that between 2016 and 2020 she filed false and fraudulent returns for clients on which she reported false business and farming losses and false charitable deductions. The returns resulted in a federal loss of at least $446,301.
Sentencing is June 28. Luikens faces up to three years in prison and a $250,000 fine.
