Tax Fraud Cases

Posted by Jeffrey Siegel on September 3, 2017

Porterville, Calif.: Preparer Marie E. Sherrill, 56, has pleaded guilty to one count of wire fraud and one count of aiding the preparation of a false return.

According to the plea agreement, Sherrill promoted a fraudulent investment program that promised the victims that their money would be put into “pooled investments” with the money of other investors to earn a high return. The money was never invested but instead was used to pay Sherrill’s personal expenses, including gambling, and to make payments to earlier investors to make them believe their money was earning a profit.

Victims lost more than $1.3 million.

Sherrill also committed tax fraud. According to court documents, she was a registered preparer operating a bookkeeping and prep business under the name Sherrill Financial Services. Between January 2011 and December 2014, Sherrill prepared false returns for her clients containing false deductions to maximize their refunds, causing a loss to the IRS of approximately $255,900.

Sentencing is Nov. 13, when Sherrill faces a maximum of 20 years in prison for wire fraud and three years in prison for the tax charge. She also faces a $250,000 fine on each count.

Baton Rouge, La.: Preparer Belvin F. Tyson, 61, has been sentenced to 30 months in prison following her conviction for tax fraud.

Tyson, who pleaded guilty in March, admitted that she fraudulently manipulated her clients’ Schedule A deductions and Schedule C income amounts, and added fraudulent dependents to their returns, to decrease their tax liability and increase refunds. To add the fraudulent dependents, Tyson obtained and sold personal ID information of other individuals to her clients, and then used the information in preparing her clients’ returns.

Her fraudulent conduct in tax years 2011 and 2012 resulted in a loss of some $100,077 to the U.S. Treasury.

At the time she committed this offense, she was still on federal supervised release for a prior federal tax crime, which she committed in 2009 and for which she was sentenced to serve 10 months in federal prison.

Tyson was ordered to make restitution to the U.S. Treasury totaling $100,077 and pay a special assessment of $200. Following her release from prison, she will also be required to serve two years of supervised release.

Cheektowaga, N.Y.: Local resident Shonnel Harris, 48, has been sentenced to eight months in prison and been ordered to repay $19,011 in restitution for her involvement in a tax scam.

Harris, who pleaded guilty in March, admitted that she acted as an unlicensed tax preparer, assisting others in the preparation of false New York state personal income tax returns, resulting in a loss of about $19,000.

Fort Lauderdale, Fla.: Businessman Thomas Daly, 53, has been sentenced to 12 months and one day in prison for tax evasion.

According to documents filed with the court, Daly evaded paying taxes on more than $1.5 million in income that he earned from 2002 to 2015. Except for the 2007 tax year, he has not filed an income tax return since 2002. He worked for a company selling hurricane-resistant windows to residential homeowners in South Florida.

In August 2009, the IRS notified Daly of its intent to levy his wages because of his failure to pay taxes. To obstruct collection efforts, Daly established his own business, South Florida Home Marketing Inc., and changed his employment status from an employee to an independent contractor. Daly listed himself as the director of SFHM and opened a business bank account in its name. Due to Daly’s change in employment status, his employer paid SFHM directly and the IRS’s attempts to levy Daly’s wages were thwarted.

From approximately August 2009 through last April, Daly used SFHM’s bank account to pay for personal expenses, including rent, cigars, international travel, entertainment, his girlfriend’s cosmetic surgery, jewelry and a boat. He also falsely classified numerous personal expenses as business expenses on the memo line of the checks drawn on the SFHM bank account. Daly admitted that he made these false entries with the intent to claim false business expense deductions and evade the assessment of his income taxes.

Daly, who pleaded guilty earlier this year, caused a tax loss of more than $351,241.

He was also ordered to serve two years of supervised release and to pay $459,481.03 in restitution to the IRS.

Windham, N.H.: Preparer Maria Panourgias, 61, has pleaded guilty to two counts of defrauding the New Hampshire Department of Revenue Administration.

Panourgias pleaded guilty to charges stemming from her representation during a DRA audit of Stylianos Asprogiannis and his Manchester-based restaurant AEK, Inc. d.b.a. Zoey’s Pizza. As tax preparer and power-of-attorney for the business, she delivered to the DRA financial records that she knew to be fraudulent.

Panourgias was sentenced to two consecutive six-month sentences, both suspended for two years. As a condition of her sentence, Panourgias is prohibited from representing any tax preparer before the DRA for two years, which includes a prohibition on her preparing or assisting in the preparation of returns. Panourgias must also pay a fine totaling $2,000 and perform 50 hours of community service.

Cincinnati: Two local businessmen have pleaded guilty to tax and structuring charges.

According to court documents, Vito Stramaglia, 49, owner of Vito Contracting Companies Inc., pleaded guilty to tax evasion and structuring cash transactions to avoid currency transactions reports. His associate, Hugo Oliver Morales-Santamaria, 31, pleaded guilty to structuring cash transactions to avoid currency transactions reports and conspiring to defraud the U.S.

Since at least 2006, Stramaglia owned approximately 20 demolition businesses and other businesses, including a local ice cream dairy bar, a car wash and an adult toy store and nightclub in Florida. Stramaglia had not filed an individual or corporate income tax return with the IRS since 1992 until he learned of an IRS criminal investigation.

Between 2008 and 2013, his demolition businesses earned over $12 million. Stramaglia admitted that his failure to file returns and pay taxes during this period caused a loss to the U.S. Treasury of between $1 million and $2.5 million.

To hide his income from detection, Stramaglia placed his businesses in the names of nominees. Both Stramaglia and Santamaria wrote, signed and cashed numerous checks and made cash withdrawals in amounts less than $10,000 to evade bank-reporting requirements. In 2011 and 2012 alone, they engaged in cash transactions that exceeded $1.4 million.

Stramaglia also provided false Social Security numbers to banks and car dealers when forms were prepared and filed with the IRS, and provided false employer identification numbers to contractors with whom he did business.

In all, Stramaglia used more than $3.4 million from his businesses to purchase in others’ names over 20 luxury vehicles and at least four residences.

Stramaglia and Santamaria also paid day laborers in cash and failed to withhold or report payroll taxes. Santamaria also admitted to paying himself a weekly salary from the demolition company bank accounts, and paying personal expenses including food, lodging, clothing, gym memberships and tuition for private school out of the business bank accounts.

The two face a maximum of five years in prison on each count, as well as a period of supervised release, restitution and monetary penalties.

For help with offers in compromise, installment agreements, innocent spouse relief, and other tax delinquencies, call Jeffrey R. Siegel, your Kansas City Tax Attorney at (913) 735-4829.