One Tax Preparer Pleads Guilty and Another Sentenced to Five Years in Prison in Separate Federal Income Tax Fraud Cases
|U.S. Attorney’s Office January 09, 2014|
CHICAGO—A former Chicago tax preparer pleaded guilty to filing nearly 3,200 false federal income tax returns for clients, while in a separate case in federal court yesterday, a suburban tax preparer was sentenced to 63 months in prison for fraudulently claiming more than $8 million in tax refunds from the Internal Revenue Service. The unrelated federal prosecutions serve as a reminder to tax preparers and taxpayers alike to comply with the law as the 2013 tax season gets underway.
“With tax season upon us, I want to assure taxpayers that the IRS-Criminal Investigation Division is focused on protecting revenue by identifying and investigating abusive tax return preparers. While most return preparers are honest and provide excellent service, a few unscrupulous tax preparers file false returns to defraud their clients and the United States government,” said James C. Lee, Special Agent in Charge of the Internal Revenue Service Criminal Investigation Division in Chicago.
“Today, we remind dishonest tax preparers: we are watching your activities. These cases should send a loud message to any dishonest return preparers who might be thinking of engaging in criminal activity, and taxpayers should choose carefully when hiring a tax preparer,” Mr. Lee added.
The guilty plea and sentencing were announced by Mr. Lee; Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Robert J. Holley, Special Agent in Charge of the Chicago Office of the Federal Bureau of Investigation.
In one case, Verlean Hollins, who owned Taxes Etc. Inc., a tax preparation business located in the 2300 block of East 71st Street, between at least 2010 and 2012, pleaded guilty to two counts of aiding and assisting in the preparation of false federal income tax returns. Hollins, 43, of South Holland, who was charged on December 19, faces a maximum sentence of six years in prison and a fine of nearly $800,000 when she is sentenced on April 22 by U.S. District Judge Samuel Der-Yeghiayan.
Hollins admitted that for calendar years 2009 through 2011, she filed a total of 3,193 individual income tax returns for clients, each of which falsely claimed higher education tax credits. As a result, she falsely claimed refunds totaling more than $3.372 million for her clients, the majority of whom paid her approximately $125 to prepare their returns, although her fee ranged between $25 and $400. The vast majority of Hollins’ clients never indicated that they or a dependent were eligible for a college tuition credit, and among the small number of her clients who were eligible for the tax credit, none provided any documents to support eligibility.
Hollins’ plea agreement anticipates an advisory federal sentencing guidelines range of 46 to 57 months in prison, and she agreed to a fine of $798,250. Each count of assisting in the preparation of a false federal income tax return carries a maximum sentence of three years in prison and a $250,000 fine or an alternate fine of twice the gain or twice the loss, whichever is greater. In addition, defendants convicted of tax offenses must pay the costs of prosecution and remain liable for any taxes and interest, as well as a civil penalty up to 75 percent of the taxes owed. The court must impose a reasonable sentence under federal statutes the advisory United States Sentencing Guidelines.
The government is being represented by Assistant U.S. Attorney Kaarina Salovaara.
In a separate case, Sharon Anzaldi, 67, of Elmwood Park, was sentenced to 63 months in federal prison and ordered to pay $851,142 in restitution to the IRS for filing 13 false federal income tax returns for herself, friends, and family that fraudulently claimed refunds totaling more than $8 million and caused the IRS to actually pay more than $1 million in bogus refunds.
Anzaldi, who represented herself and was convicted at trial last summer, is associated with the sovereign citizen movement. She was ordered to begin serving her sentence on February 25 by U.S. District Judge Harry Leinenweber. Evidence at trial showed that in one instance, Anzaldi charged a couple $31,000 for her “services” for filing a fraudulent tax return that they simply went along with and did not really understand. The couple returned the bulk of their fraudulent refund but continue to accrue penalties and interest on the amount they spent before returning the money.
Convicted at trial with Anzaldi were her son, Phillip DeSalvo, 42, of Bartlett, who was sentenced to 30 months in prison, and Steven Latin, 51, of Crystal Lake, who was sentenced to 18 months in prison.
The government was represented by Assistant U.S. Attorneys Rachel Cannon and Dylan Smith.