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2024-07-09 13:08:48From the Crime Desk – June 2024
**By Federal Tax Update Staff **
This month's From the Crime Desk covers guilty pleas, convictions, and sentences for tax crimes during the month of June 2024. Guilty pleas. Georgia CPA and tax preparer, Herbert Lewis, pleaded guilty to conspiracy to defraud the government and filing a false personal tax return. These crimes were related to his participation in the promotion and sale of abusive syndicated conservation easement tax shelters. According to court records, for at least five years Lewis promoted and sold tax deductions to his wealthy clients in the form of units in illegal syndicated conservation easement tax shelters organized and created by co-defendants Jack Fisher, James Sinnott, and others. Lewis' clients claimed $14 million in false deductions, causing an almost $5 million tax loss to the IRS. For their involvement in the scheme, Fisher and Sinnott were sentenced to 25 and 23 years in prison, respectively. Lewis will be sentenced at a later date. California tax preparer, Salvador Gonzalez, pleaded guilty to preparing and filing false tax returns for his clients. Gonzalez directed his clients to create a phony corporation and to title their homes, cars, and other assets in the name of the corporation. The corporate returns included the clients' personal expenses and generated large losses. Gonzalez then prepared the clients' individual income tax returns, which claimed the fraudulent business losses. Gonzalez also fabricated deductions on the personal returns, such as unreimbursed employee expenses, cash contributions to charity, and medical and dental expenses. Gonzalez prepared or assisted in the preparation of more than 11,000 tax returns that requested refunds from the IRS totaling more than $38 million. Christopher Garraty, pleaded guilty to evading more than $400,000 in taxes on income he earned as a commercial fisherman. Despite his substantial income from fishing, Garraty did not file nine years of federal income tax returns until 2012. When he filed the delinquent returns, he reported that he owed a total of approximately $234,497 in taxes for those nine years. But even after reporting that he owed taxes, Garraty did not make any payments to the IRS. In addition, Garraty failed to file returns for another four years despite earning approximately $600,000 in fishing income across those years and owing approximately $179,382 in taxes. Convictions. A federal jury convicted former Utah movie producer Paul Kenneth Cromar of tax evasion and forcibly retaking property that had been seized by the government to pay his outstanding tax debt. According to court records, Cromar owned and operated a freelance film and media production company. For approximately 15 years, Cromer neither filed any tax returns nor paid any taxes. After an audit, the IRS assessed over $700,000 in taxes, interest and penalties. After Cromar failed to make any payments towards his outstanding debt, the IRS filed a foreclosure suit and Cromer's house was ordered sold. Shortly before the court-ordered sale closed, Cromar forcibly broke into the home and attempted to reclaim it. With the help of others, he occupied the home unlawfully for five months, fortifying it with weapons, sandbags, and wooden boards tactically placed throughout the house. Cromar caused a total tax loss to the IRS of over $1.174 million. A federal jury convicted Jason Pecoy, a construction project manager, for conspiring to defraud the United States by concealing income from the IRS. Pecoy received at least $600,000 in cash payments from a co-conspirator for the purchase and construction of a custom-built home on Cape Cod. Instead of depositing the cash he received into the businesses' bank accounts, Pecoy distributed the cash directly to vendors and subcontractors. Pecoy also created and maintained separate ledgers documenting the cash payments, false contracts and cost estimates, and false entries in the company's accounting system to conceal the cash payments. Sentences. Marijuana dispensary owner Ryan Richmond was sentenced to 24 months in prison for evading income taxes, failing to file an income tax return and obstructing an IRS audit. According to court records, for at least four years Richmond paid his business' operating expenses extensively in cash and routed customer credit card payments through an unrelated third-party bank account to conceal his business' gross receipts. In addition, Richmond didn't report his business income on his tax returns. Finally, Richmond obstructed the IRS by misleading an IRS auditor examining his taxes about his knowledge of profits derived from the business. In total, Richmond caused a tax loss of over $1 million. Christos Karasarides Jr. and Ronald DiPietro, who led a conspiracy that caused millions in tax losses, were sentenced to prison for tax, money laundering, conspiracy, and obstruction crimes arising out of their ownership and operation of illegal gambling businesses. Karasarides Jr. was sentenced to serve 262 months in prison and three years of supervised release, pay restitution, and forfeit his residence and $419,768 in cash. Ronald DiPietro was sentenced to 112 months in prison and three years of supervised release and was ordered to pay restitution. In total, Karasarides caused a tax loss of $5.4 million and DiPietro caused a tax loss of $4.7 million. Florida tax return preparer, John Borgela, was sentenced to 30 months in prison, two years of supervised release and to pay restitution for conspiring to defraud the United States by preparing and filing false tax returns for clients. According to court records, Borgela and his co-conspirator filed hundreds of false returns each year. They inflated tax withholdings and reported fictitious itemized deductions to generate refunds for clients and to conceal his participation in the fraud, Borgela did not list his name as preparer or include his electronic filing number (EFIN) on the returns. Instead, he used his employees' names and the EFINs of other return preparation businesses. Borgela and his co-conspirator caused a tax loss of approximately $970,000. Texas businessman John L. Petrone was sentenced to 37 months in prison, three years of supervised release and to pay restitution to the United States for evading taxes on income he earned from his business. According to court records, for six years Petrone neither filed income tax returns nor paid taxes despite earning hundreds of thousands of dollars from his business. Petrone attempted to evade his income taxes by opting not to withhold federal taxes from his paychecks, operating the business under different names, dealing in cash, using business bank accounts to pay for personal expenses, and lying to the IRS during an audit. In addition, Petrone did not pay his business' employment taxes. Petrone caused a tax loss of over $529,000. © 2024 Thomson Reuters/Tax & Accounting. All Rights Reserved. | Privacy Statement Document Title:From the Crime Desk – June 2024 (07/09/2024) Checkpoint Source:Federal Tax Updates © 2024 Thomson Reuters/Tax & Accounting. All Rights Reserved.