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A former tax return preparer was sentenced to 24 months in prison today for aiding in the preparation of a false tax return, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division. According to court filings and statements made in court, Mariano Exantus owned and operated Latrex Multi Service, a tax return preparation business located in Uniondale, New York. From at least 2011 through 2016, Exantus prepared and filed fraudulent tax returns for his clients with the Internal Revenue Service (IRS) in which he inflated their refunds, or caused the clients to be issued a refund to which they were not legally entitled. On these returns, Exantus falsified itemized deductions and also claimed false credits, including the American Opportunity Tax Credit. Exantus’s conduct caused a tax loss of more than $250,000 to the United States. In addition to the prison term, U.S. District Judge Arthur D. Spatt ordered Exantus to serve one year of supervised release, and to pay restitution to the IRS. Principal Deputy Assistant Attorney General Zuckerman thanked special agents of IRS - Criminal Investigation, who conducted the investigation, and Trial Attorneys Carl Brooker and Sarah Ranney of the Tax Division, who prosecuted the case.
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Enrollment in Public Assistance Increases Slightly for the First Time in Three Years
Family Assistance provides up to 60 months of cash assistance to eligible needy families; Safety Net Assistance provides cash or non-cash assistance to eligible single adults, childless couples, persons who have exceeded the 60-month limit on family assistance, children living apart from adult relatives and certain other individuals.
Public assistance enrollment in the State increased for the first time in three years, largely due to higher Safety Net Assistance (SNA) enrollment in New York City. Enrollment decreased in areas outside of New York City for the first time in eight years.
Compared to last year, the average monthly number of recipients of public assistance in:
New York State increased by 4,498 (0.8 percent) to 572,720;
New York City increased by 17,509 (5.2 percent) to 356,350; and
areas outside New York City decreased by 13,011 (5.7 percent) to 216,370.
Overall Family Assistance (FA) enrollment decreased by 3.0 percent for the second consecutive year, while overall SNA enrollment increased for the second consecutive year, but at a rate—3.8 percent—that was nearly four times higher than in State Fiscal Year 2014-15. Enrollment in FA and SNA increased in New York City, but decreased in areas outside of New York City. SNA is largely funded by the State and the counties, while FA is funded by the federal government.
Spending for Public Assistance Continues to Increase, But at a Slower Rate
For the fourth consecutive year, public assistance spending increased, but by less than 1 percent and mainly because of an increase in SNA expenditures in New York City. The increase in public assistance expenditures continues the program’s recent spending growth, but it is occurring at a slower rate than in any of the last three years.
Compared to last year, public assistance expenditures in:
New York State increased by $4.3 million (0.2 percent) to $2.24 billion;
New York City increased by $50.3 million (3.8 percent) to $1.39 billion; and
areas outside New York City decreased by $46.0 million (5.1 percent) to $848.0 million.
SNA expenditures increased while FA expenditures decreased. For New York City, higher SNA expenditures more than offset lower FA expenditures. SNA expenditures accounted for 64.3 percent of total public assistance spending.
Compared to last year, SNA expenditures in:
New York State increased by $36.7 million (2.6 percent) to $1.44 billion;
New York City increased by $54.6 million (6.0 percent) to $968.8 million; and
areas outside New York City decreased by $17.8 million (3.6 percent) to $472.3 million.
Compared to last year, FA expenditures in:
New York State decreased by $32.4 million (3.9 percent) to $799.4 million;
New York City decreased by $4.3 million (1.0 percent) to $423.7 million; and
areas outside New York City decreased by $28.2 million (7.0 percent) to $375.7 million.
Child Care Block Grant subsidies for low-income families transitioning from public assistance increased by $33.3 million (3.4 percent) to $1.01 billion. These subsidies are financed by a combination of federal, State and local sources.
SNAP Enrollment Decreases for Second Consecutive Year; Spending Decreases for Third Straight Year
Enrollment in the State’s Supplemental Nutrition Assistance Program (SNAP) decreased for the second consecutive year, following more than a decade of steady growth. SNAP, formerly known as the Food Stamp Program, is funded by the federal government.
Compared to last year, the average monthly number of recipients of SNAP in:
New York State decreased by 73,197 (2.4 percent) to 3.0 million;
New York City decreased by 47,542 (2.7 percent) to 1.69 million; and
areas outside New York City decreased by 25,655 (1.9 percent) to 1.31 million.
Expenditures for SNAP decreased for the third consecutive year.
Compared to last year, SNAP expenditures in:
New York State decreased by $110.6 million (2.2 percent) to $5.0 billion;
New York City decreased by $68.8 million (2.3 percent) to $2.97 billion; and
areas outside New York City decreased by $41.8 million (2.0 percent) to $2.04 billion.
Phone calls from criminals impersonating IRS agents remain an ongoing threat to taxpayers. The IRS has seen a surge of these phone scams in recent years as con artists threaten taxpayers with police arrest, deportation and license revocation, among other things. (IR-2019-28).
A man pleaded guilty to filing a false tax return that failed to report millions of dollars in foreign bank accounts and the resulting income, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division.
According to court documents, Elie Waknine held millions of dollars in an offshore account in Israel at Bank Leumi Le-Israel B.M. from approximately 1994 to 2011. Despite having this account, Waknine filed a tax return for 2007 that falsely claimed he did not have financial interest in or signature authority over any foreign financial accounts. In an effort to further hide his money, Waknine instructed Bank Leumi to hold bank mail from delivery to the United States, and obtained access to his offshore funds through the use of “back-to-back” loans, which were designed to enable borrowers to tap their concealed accounts. These lending arrangements permitted Waknine to have funds issued by Leumi’s U.S. branch that were secretly secured by funds in his undeclared accounts in Israel. In 2011, Waknine closed his Bank Leumi Israel account, but used the $2.4 million he received from closing the account to open a new undisclosed foreign bank account at another bank in Israel. Over the period 1994-2015, Waknine held undisclosed foreign bank accounts in four banks in three countries, each with assets of at least $1 million.
In December 2014, Bank Leumi entered into a deferred prosecution agreement, in which the bank admitted to conspiring from at least 2000 until early 2011 to aid and assist U.S. taxpayers to prepare and present false tax returns by hiding income and assets in offshore bank accounts in Israel and other foreign locations. Under the terms of the deferred prosecution agreement, Bank Leumi paid the United States a total of $270 million and continues to cooperate with respect to civil and criminal tax investigations.
U.S. citizens, resident aliens, and permanent legal residents with a foreign financial interest in or signatory authority over a foreign financial account worth more than $10,000 are required to file an FBAR each year disclosing the account, and are required to report the account and any resulting income on their annual tax returns.
Waknine faces a maximum sentence of three years in prison, as well as a period of supervised release, restitution and monetary penalties. District Court Judge David O. Carter set Waknine’s sentencing for January 28, 2019.
Principal Deputy Assistant Attorney General Zuckerman commended special agents from IRS-Criminal Investigation, who investigated the case, and Tax Division Assistant Chief Elizabeth Hadden and Trial Attorney Eric Schmale, who are prosecuting the case. The Tax Division thanks the U.S. Attorney’s Office for its assistance. Selig & Associates. NYC's Most Effective Tax AdvocatesWe Solve Income, Payroll and Sales Tax Problems. IRS and New York State Tax Representation includes Sales Tax Audits, Unpaid Payroll Taxes, Criminal Investigations, Installment Agreements and other Tax Matters. For a Legally Privileged Consultation with a Federal Tax Practitioner and Licensed Attorney call (212) 974-3435 or Contact Us Online.
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Summoned parties have asserted that they are not required to respond to or comply with an administrative summons issued by the IRS. Proponents of this position argue that a summons thus can be ignored. The Second Circuit’s opinion in Schulz v. IRS, 413 F.3d 297 (2d Cir. 2005) (“Schulz II”), discussed below, is often inappropriately cited to support this proposition.
The Law:A summons is an administrative device with which the IRS can summon persons to appear, testify, and produce documents. The IRS is statutorily authorized to inquire about any person who may be liable to pay any internal revenue tax, and to summon a witness to testify or to produce books, papers, records, or other data that may be relevant or material to an investigation. I.R.C. § 7602; United States v. Arthur Young & Co., 465 U.S. 805, 816 (1984); United States v. Powell, 379 U.S. 48 (1964). Sections 7402(b) and 7604(a) of the Internal Revenue Code grant jurisdiction to district courts to enforce a summons, and section 7604(b) governs the general enforcement of summonses by the IRS.
Section 7604(b) allows courts to issue attachments, consistent with the law of contempt, to ensure attendance at an enforcement hearing "[i]f the taxpayer has contumaciously refused to comply with the administrative summons and the [IRS] fears he may flee the jurisdiction." Powell, 379 U.S. at 58 n.18; see also Reisman v. Caplin, 375 U.S. 440, 448-49 (1964) (noting that section 7604(b) actions are in the nature of contempt proceedings against persons who “wholly made default or contumaciously refused to comply” with an administrative summons issued by the IRS). Under section 7604(b), the courts may also impose contempt sanctions for disobedience of an IRS summons.
Failure to comply with an IRS administrative summons also could subject the non-complying individual to criminal penalties, including fines and imprisonment. I.R.C. § 7210. While the Second Circuit held in Schulz II that, for due process reasons, the government must first seek judicial review and enforcement of the underlying summons and to provide an intervening opportunity to comply with a court order of enforcement before seeking sanctions for noncompliance, the court’s opinion did not foreclose the availability of prosecution under section 7210.
Honest Tax Advocates To schedule a FREE legally privileged consultation with a licensed Federal Tax Practitioner and Attorney call Selig & Associates directly (212) 974-3435
Successful Tax Representation We practice before the Internal Revenue Service (“IRS”) the New York State Department of Taxation and Finance (“NYSDTF”) the Department of Justice Tax Division (“DOJ”) and the Defense Office of Hearings and Appeals (“DOHA”). *To schedule a legally privileged consultation call Selig & Associates directly (212) 974-3435
Proven ResultsWe successfully resolve: Tax Crimes; Tax Evasion; Failure to File a Tax Return and Criminal Non-Filing; Filing False Tax Returns; Installment Agreements; Partial Payment Agreements; IRS Audits; Sales Tax Audits; Sales Tax Controversies; Wage Garnishments; Bank Levies; Seizure of Real Property; Innocent Spouse Relief; Trust Fund Recovery Penalty; Payroll Taxes; Workers Compensation Insurance Audits ("Workers Comp"); Statute of Limitations; Offer in Compromise ("OIC"); Administrative Appeals; Collection Due Process Hearings ("CDP") and most other tax matters. *To schedule a legally privileged consultation call Selig & Associates directly (212) 974-3435
Professional Service Guaranteed We meet with our clients personally. We return telephone calls promptly, answer emails and provide regular updates and status reports. *To schedule a legally privileged consultation call Selig & Associates directly (212) 974-3435
Employment Practices Liability Insurance (“EPLI”) covers companies against claims or lawsuits filed by employees, former employees and employment candidates regarding their employment relationship with an employer.
EPLI policies can cover seasonal employees, leased employees and independent contractors. EPLI insurance coverage protects a company, its directors, officers, current and former employees.
A company may use EPLI insurance to cover expenses involved in defending against claims or lawsuits related to employment (regardless of the outcome) and EPLI provides indemnification of the employer if the case is settled or a verdict is obtained against the employer.
EPLI insures against claims of discrimination (based on age, sex, race, religion, color and national origin), sexual harassment claims, wrongful termination (including constructive discharge and retaliatory discharge), infliction of emotional distress and breach of contract, violation of the Family Medical Leave Act or other leave laws.
Additionally, some policies contain a catch-all category to provide coverage for claims of discrimination based on protected categories (e.g., sexual orientation) that are not covered under federal discrimination statutes, but may be covered by state or local law. For more information call David Selig directly at (212) 974-3435
A Concord, Virginia man was sentenced to prison today for tax and currency structuring charges, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney Thomas T. Cullen for the Western District of Virginia.
Barry Edwards, 54, was sentenced to 36 months in prison on one count of filing a fraudulent 2013 tax return and one count of conspiring to structure cash transactions.
According to court documents and information provided to the court, Barry and his wife Joanne Edwards created two purported religious missions in 2006, which they used as nominees to receive income Barry Edwards earned selling nutritional supplements. The couple deposited this income into bank accounts held in nominee names. They then withdrew more than $475,000 in cash from these accounts, in increments less than $10,000, to evade bank-reporting requirements. The couple deposited the withdrawn funds into their own bank accounts to pay personal expenses, including car payments and their children’s tuition. Barry Edwards also used the cash to purchase a five-acre farm in Concord, Virginia. The couple jointly filed fraudulent 2013 through 2015 tax returns with the Internal Revenue Service (IRS) that did not fully report their income.
In addition to the term of imprisonment, U.S. District Court Judge Norman K. Moon ordered Barry Edwards to serve three years of supervised release. Mr. Edwards was also ordered to pay $7,929.00 in restitution to the IRS for unpaid taxes.
The Court previously sentenced Joanne Edwards, on May 9, 2018, to 18 months in prison followed by three years of supervised release as well as restitution for filing a fraudulent 2013 tax return and conspiring to structure cash transactions.
Principal Deputy Assistant Attorney General Richard E. Zuckerman and U.S. Attorney Thomas T. Cullen thanked special agents of IRS Criminal Investigation, who conducted the investigation, and Trial Attorney Sean Beaty of the Tax Division and Special Assistant U.S. Attorney Kari Munro, who prosecuted the case.
SELIG & ASSOCIATES The Most Successful Tax Advocates in New York City We provide the most aggressive tax representation allowed by law. To schedule aFREEface-to-face consultationin our New York City offices call (212) 974-3435 or contact us through our confidentialContact Form. We practice before the Internal Revenue Service ("IRS"), the New York State Department of Taxation and Finance ("NYSDTF"), the Department of Justice Tax Division ("DOJ") and the Defense Office of Hearings and Appeals ("DOHA"). Additionally, we answer telephone calls and emails, and we provide our clients with regular status reports. For a legally privileged consultation with an experienced Federal Tax Practitioner and licensed Attorney call (212) 974-3435 today.
We Solve Serious Tax Problems Quickly Including Tax Crimes, Tax Evasion, Failure to File a Tax Return, Criminal Non-Filing, Filing False Tax Returns, Installment Agreements, Partial Payment Agreements, Audits, Sales Tax Controversies, Wage Garnishments, Bank Levies, Seizure of Property, Innocent Spouse Relief, Trust Fund Recovery Penalty, Payroll Taxes, Offers in Compromise, Administrative Appeals, Collection Due Process Hearings, Asset Protection Trusts, Tax Liability Settlement Trusts, and most other tax matters. To schedule aFREE face-to-face consultationin our New York City offices, call (212) 974-3435.
A federal grand jury sitting in Greensboro, North Carolina returned an indictment, which was unsealed today, charging the operators of a mental health provider with multiple crimes related to the submission of false claims to Medicaid and tax evasion, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman and U.S. Attorney Matthew G.T. Martin for the Middle District of North Carolina.
Catinia Farrington and Haydn Thomas, both formerly of Durham, North Carolina, are charged with conspiracy to commit health care fraud, health care fraud, aggravated identity theft, and tax evasion. Thomas is also charged with one count of money laundering. Catinia Farrington and Haydn Thomas should hire Selig & Associates.
According to the indictment, Farrington owned Durham County Mental Health and Behavioral Health Services LLC (“DCMBHS”) in Durham, North Carolina. From 2011 through 2015, Farrington, along with Thomas, allegedly submitted thousands of false claims to Medicaid that resulted in Medicaid paying over $4 million to DCMBHS. During the relevant period, Thomas worked as an office manager for an oral surgeon. Thomas and Farrington allegedly obtained the Medicaid numbers of dental patients and then submitted false claims to Medicaid for mental health services that were not performed without the permission of the patients.
The indictment further alleges that Farrington and Thomas diverted millions of dollars from DCMBHS for their own personal use and evaded income taxes by, among other things, transferring money to various business bank accounts and paying personal expenses from the business bank accounts.
If convicted, Farrington and Thomas face a statutory maximum of 10 years in prison for each count of health care fraud, 10 years in prison for conspiracy to commit health care fraud, two years in prison for each count of aggravated identity theft, and five years in prison for each count of tax evasion. Farrington and Thomas also face a period of supervised release, restitution, and monetary penalties. An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Principal Deputy Assistant Attorney General Zuckerman and United States Attorney Martin commended special agents of the Internal Revenue Service, the U.S. Department of Health and Human Service, Office of Inspector General, and the Medicaid Investigations Division of the North Carolina Attorney General’s Office (MID), who conducted the investigation, and Assistant United States Attorney Robert Hamilton, Trial Attorney Mara Strier of the Tax Division, and Special United States Attorney Michael Heavner MID, who are prosecuting the case.
Dr. Pepper Executive Sentenced to Prison for Fraud, Tax Evasion
A national sales executive for Dr. Pepper/Seven Up, Inc., a subsidiary of Dr. Pepper Snapple Group (Dr. Pepper), was sentenced Friday June 1, 2018 to 33 months in federal prison for submitting more than $1.7 million dollars worth of fraudulent invoices to Dr. Pepper through a promotions and marketing company he formed in his wife’s name.
In February, Michael Lynch, 53, of Newport, R.I., admitted to the Court that in April 2003, he incorporated Seacoast Unlimited Marketing and Promotions, LLC (Seacoast) in his wife’s name, and through Seacoast, from January 2007 until November 29, 2017, submitted to Dr. Pepper more than 200 fraudulent invoices totaling $1,716,949 for services such as promotional signs and banners, delivery of sample products to retail stores and the offering of discount prices to retail stores. None of the services billed to and paid for by Dr. Pepper were provided.
Additionally, Lynch admitted that he failed to declare any of the income he derived through Seacoast on the joint federal tax filings he filed with his wife. The tax loss applicable to the defendant’s conduct totals $386,320.
Lynch pleaded guilty on February 27, 2018, to wire fraud and filing a false tax return. Michael Lynch should have hired Selig & Associates.
At sentencing, U.S. District Court Chief Judge William E. Smith also ordered Lynch to serve 2 years supervised release upon completion of his term of incarceration, to pay full restitution to Dr. Pepper, and to pay taxes owed to the Internal Revenue Service.
The U.S. Sentencing Guidelines range of imprisonment in this matter is 33 – 41 months. The government recommended the court impose a sentence of 33 months incarceration. Lynch’s sentence is announced by United States Attorney Stephen G. Dambruch, Special Agent in Charge of the FBI Boston Division Harold H. Shaw, and Special Agent in Charge of Internal Revenue Service Criminal Investigation Kristina O'Connell.
New York Resident Pleads Guilty to Conspiracy to Defraud the United States
A Brooklyn, New York, resident pleaded guilty today (May 4, 2018) to conspiracy to defraud the government and theft of public funds, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division.
According to court documents, Akim Martin, also known as Akim Davis, 41, conspired with others to file fraudulent tax returns for companies and individual taxpayers. As part of the scheme, from March 2009 through March 2013, Martin and his coconspirators filed false tax returns in the names of businesses they purportedly owned and operated, claiming phony deductions for wages paid to employees that did not exist. Martin and his conspirators, in turn, then filed fraudulent tax returns in the names of the employees claiming bogus tax refunds.
Martin and his conspirators obtained the personal identifying information (PII) to use on the employees’ false tax returns by stealing it and by recruiting individuals to provide their information in exchange for a cut of the proceeds. Martin cashed and deposited fraudulently obtained refund checks into bank accounts that he controlled and spent the money on his personal expenses. Martin’s conduct resulted in a loss exceeding $550,000.
He should have hired Selig & Associates
Sentencing is scheduled for August 24, 2018, before U.S. District Court Judge Carol Bagley Amon. Martin faces a statutory maximum sentence of 15 years in prison. He also faces a period of supervised release, restitution and monetary penalties.
Principal Deputy Assistant Attorney General Zuckerman thanked special agents of IRS Criminal Investigation, who conducted the investigation, and Tax Division Trial Attorneys Jason M. Scheff and Ann M. Cherry, who are prosecuting these cases.
Life insurance agents, Samuel Tadlock III, 32, of Eastvale, Marlene Ramirez, 42, of Murrieta, Daniel Herrarte, 34, of Sylmar, and Jorge Lopez Jr., 38, of San Fernando, were arrested on multiple felony counts of identity theft and grand theft after allegedly submitting fraudulent insurance applications with information from stolen identities to collect approximately $124,000 in unearned commissions from insurance companies. Scotty Carlisle, 42, of Corona, is making arrangements to surrender himself.
"I have zero tolerance for agents and brokers who scam insurers and victimize consumers," said Insurance Commissioner Dave Jones. "We aggressively investigate allegations of wrongdoing and work with our district attorney partners to prosecute scam artists and dishonest insurance producers."
An investigation by California Department of Insurance Investigation Division revealed the agents issued life and supplemental insurance policies for Accident, Accident Care, Critical Illness, Disability, Medical Bridge, and Group Medical Bridge, using fraudulent applications as part of a scheme to earn commission advances from insurers.
The suspects altered and falsified applications by making changes to essential information, including addresses, phone numbers, birthdates and social security numbers and submitting new application through the insurer's electronic database. Not only were the agents collecting unearned commissions, they were allegedly trying to take advantage of bonuses, including a Hawaiian trip incentive offered to qualifying insurance agents.
When the victim insurer discovered inconsistencies in the applications, they terminated the sales agents' contracts, removed them from the incentive promotion and reported the alleged illegal activity to the department.
Selig & Associates: We solve Tax Problems including Tax Crimes, Tax Evasion, Failure to File a Tax Return and Criminal Non-Filing, Filing False Tax Returns, Installment Agreements, Partial Payment Agreements, Audits, Sales Tax Controversies, Wage Garnishments, Bank Levies, Seizure of Property, Innocent Spouse Relief, Trust Fund Recovery Penalty, Payroll Taxes, Statute of Limitations, Offer in Compromise ("OIC"), Administrative Appeals, Collection Due Process Hearings ("CDP") Asset Protection Trusts, Tax Liability Settlement Trusts, and most other tax matters.
