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Thursday, May 7, 2015

DOJ SEEKS TO SHUT DOWN TAX PREPARATION BUSINESS ACCUSED OF PREPARING FRAUDULENT TAX RETURNS

FROM:  U.S. JUSTICE DEPARTMENT
Tuesday, May 5, 2015
Justice Department Seeks to Shut Down Florida Tax Return Preparer and Owner of Tax Preparation Business

The United States filed a civil injunction suit seeking to bar a Tampa, Florida, man from owning, operating or franchising a tax return preparation business and from preparing tax returns for others, the Justice Department announced today.  The complaint also requests that the court order the defendant to disgorge the fees that he obtained through alleged fraudulent tax return preparation.

The suit, which was filed in the U.S. District Court for the Middle District of Florida, alleges that Milot Odne owns and operates Rapid Tax 1, a tax return preparation business in the Tampa area.  According to the complaint, Odne was previously a franchisee of LBS Tax Services.

The suit alleges that Odne targets primarily low-income customers with deceptive and misleading advertisements, prepares and files fraudulent tax returns to fraudulently increase his customers’ refunds, and profits through unconscionable and exorbitant fees — all at the expense of his customers and the U.S. Treasury.

According to the suit, there is a “culture of greed” at Odne’s tax return preparation stores “that expressly promotes and encourages the preparation of false and fraudulent federal tax returns in order to maximize corporate and individual profits.”  The complaint alleges that Odne’s stores engage in fraudulent activity, including:

            •           Falsely claiming the Earned Income Tax Credit;

            •           Claiming improper filing status (i.e., head of household);

            •           Fabricating businesses and related business income and expenses;

            •           Fabricating itemized deductions on a Schedule A, including for unreimbursed employee business expenses, automobile expenses and charitable contributions;

            •           Falsely claiming education credits to which customers are not entitled;

            •           Improperly preparing returns based on paystubs rather than Forms W-2; and

            •           Failing to provide customers with a copy of a competed tax return, as required.

According to the complaint, the Internal Revenue Service (IRS) estimates that the tax loss resulting from these activities for the 2012, 2013 and 2014 tax years could be up to $35.5 million or more.

This lawsuit is one of several filed against former LBS Tax Services-related individuals, including Walner Gachette, Douglas Mesadieu, Jean Demesmin, Kerny Pierre-Louis, Demetrius Scott, Jason Stinson, Wilfrid Antoine, Tonya Chambers, Jehoakim Victor and Lauri Rodriguez.  In February 2015, a court barred Victor and Rodriquez from preparing tax returns for others and from owning or operating a tax return preparation business.