Tax Fraud Blotter: Treasure this

4 months ago 1366

He'll always have Paris; "cruel, callous and self-absorbed;" making Book; and other highlights of recent tax cases.

Martinsburg, West Virginia: Ayodele Arasokun, leader of an international conspiracy to file false U.S. returns and obtain millions in refunds, has been convicted on 21 counts of wire fraud and aggravated ID theft.

From a location outside Paris, Arasokun orchestrated a scheme to file 1,701 false returns and claim $9.1 million in refunds. (West Virginians were among those who had their identities stolen and false returns filed in their names.) The IRS paid $2.2 million in fraudulent refunds.

Arasokun caused the money obtained from the IRS to be transferred to pre-paid debit cards or to checking accounts that he monitored. Investigators discovered that he was tracking some 700 U.S.-based accounts containing more than $50 million.

Santa Barbara, California: Darrell Arnold Aviss has been sentenced to 133 months in prison for stealing some $14 million from victims who thought their investments would be used to purchase annuities and for failing to pay more than $3 million in federal income tax.

Described by the judge as "cruel, callous and self-absorbed," Aviss ran his Ponzi scheme from at least 2012 through the summer of 2020, soliciting money from people who wanted to purchase annuities from insurance companies based in Switzerland. Aviss claimed some of the annuities would pay interest of 5% to 7%. He arranged for the victims to receive fabricated statements showing the purported increasing value of the annuities.

Victims, most older than 60, gave Aviss more than $14 million. One victim lost more than $9.7 million; Aviss stole $400,000 from another victim whom he knew recently had been diagnosed with cancer.

Instead of purchasing annuities, Aviss used the money for, among other things, Ponzi payments to victims, mortgage payments, luxury car leases, expensive watches, trips to Monaco, more than $170,000 in purchases at a Santa Barbara nightclub and 20 tickets to a U2 concert and after-party. 

Aviss also failed to file tax returns for 2014 to 2016 and failed to pay any income taxes for those years. He evaded paying more than $3 million in income taxes and failed to file FBARs for 2015 through 2020 in an attempt to conceal accounts he controlled in Monaco. He transferred victims' money to these offshore accounts, one of which was established with information from an ID theft victim.

Aviss was also ordered to pay $14,486,169 in restitution and to forfeit his $4 million home.

Montgomery, Alabama: Tax preparer Lashunda Deann Crittenden has been sentenced to 16 months in prison and a year of supervised release for aiding and assisting in the preparation of a false income tax return. 

Crittenden, who ran a tax prep service, admitted that she prepared and e-transmitted a return that claimed a client incurred $8,726 in solar electric property costs, $6,358 in medical and dental expenses and $8,364 in gifts to charity despite knowing that the client was not entitled to claim these items for calendar 2017. The IRS subsequently paid an inflated refund that Crittenden profited from.

Crittenden, who previously pleaded guilty, was also ordered to pay a $20,000 fine and $11,993 in restitution to the IRS.

Napoleon, Missouri: Business owner Sandra Eller has been sentenced to 18 months in prison for failing to pay over nearly $2 million in payroll and employment taxes.

Eller, who previously pleaded guilty, has owned three different medical billing and claims processing companies in Oak Grove and Grain Valley, Missouri. She  withheld FICA taxes and income taxes totaling $939,294 from employees' paychecks from 2016 through 2019.

Instead of forwarding those taxes to the government, she kept them for her business. Eller also owed the employer's portion of the taxes and state tax withholdings that were not paid over, all of which total $1,051,679.

Her conduct resulted in a tax loss of $1,990,973.

Eller was also ordered to pay $1,643,200 in restitution to the IRS and $186,844 in restitution to the Missouri Department of Revenue.


Gloucester City, New Jersey: Business owner John Degan, of Philadelphia, has admitted to failing to pay over payroll taxes to the IRS, failing to file personal income tax returns and fraudulently obtaining a Paycheck Protection Program loan.

He owned and operated Companion Services Group Inc., a building maintenance and restoration service company. Degan admitted that for tax years 2016 through 2020, he failed to file payroll tax returns and failed to pay over $600,629 in withheld employment taxes on behalf of his employees. He tried to hide from the IRS more than $4.4 million in wages that he paid to himself and his employees by not filing and submitting W-2s or W-3s to the Social Security Administration.

Degan admitted that he received a yearly salary of $140,000 to $170,000 from Companion, willfully failed to file his federal income tax returns for tax years 2016 through 2020, and has not filed a tax return since 2003. He also failed to file the corporate tax returns for Companion, a business that generated more than $1.4 million annually.

In April 2020, Degan submitted a PPP application for Companion in which he falsely represented that the company had employees and payroll expenses. He also submitted various phony IRS forms to establish that he was paying compensation to his employees. The lender approved the loan and disbursed $193,407.

Failing to collect, account for and pay over payroll taxes carries a maximum of five years in prison and a fine of $250,000, or twice the gross gain or loss from the offense, whichever is greatest. Failing to file federal income tax returns carries a maximum of a year in prison and a fine of $100,000, or twice the gross gain or loss from the offense, whichever is greatest. The bank fraud count carries a maximum of 30 years in prison and a fine of $1 million. Sentencing is Feb. 14. Degan has agreed to make full restitution to the IRS and to the lender. 

Philadelphia: Former Philadelphia City Treasurer Christian Dunbar  has pleaded guilty to procurement of citizenship unlawfully and through multiple false statements, submitting false citizenship papers, and failure to file tax returns.

He admitted to procuring U.S. citizenship fraudulently by providing false information about where, with whom he was living and where his child was residing, and by submitting a false lease and a false W-2 to U.S. Citizenship and Immigration Services.

Dunbar also admitted to not filing his personal income tax returns for 2015, 2016 and 2019, during the last of which he was serving as the Philadelphia City Treasurer.

Fairfield, California: Tax preparer Myrna Kawakami, 70, has pleaded guilty to making and subscribing a false return.

Kawakami ran K.I.M. Tax Book Services, where she assisted taxpayers in preparing fraudulent federal income tax returns. The returns claimed thousands of dollars in itemized deductions based on ineligible expenses, resulting in fraudulent refunds. Her fraudulent preparation of 1,035 returns between tax years 2012 and 2015 cost the IRS some $1,561,815.

Kawakami also submitted fraudulent returns for herself, significantly underreporting the income from her tax business and claiming education credits based on ineligible expenses. Using these methods for tax years 2013 and 2014, she reduced the amount of tax she owed by some $40,390.

Sentencing is Feb. 23. Kawakami faces a maximum of three years in prison and a $100,000 fine. 

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