Tax Fraud Blotter: Artful dodger | #employeefraud | #recruitment | #corporatesecurity | #businesssecurity | #

Red-handed; marina fees and airline tickets; similar patterns; and other highlights of recent tax cases.

West Hollywood, California: Philip Righter, 43, has agreed to plead guilty to federal criminal charges that he sold bogus art he claimed was created by artists such as Jean-Michel Basquiat, Keith Haring, Roy Lichtenstein and Andy Warhol. He also admitted using fake paintings as collateral for loans on which he later defaulted and using pieces for fraudulent write-offs on his income tax returns.

Righter’s scheme attempted to bilk victims out of well over $6 million, and he caused losses of at least $758,265. Additionally, his fraudulent returns cost the U.S. more than $100,000.

From 2016 until June 2018, Righter executed a scheme using counterfeit and fraudulent art that he asserted was genuine. He supported these false claims with fraudulent provenance — or chronology-of-origin — documents. Before August 2016, Righter generally conducted these fraudulent transactions in his own name. After the FBI and Los Angeles police interviewed him about bogus Keith Haring art he attempted to sell to a Miami art gallery, Righter began using the names of other people to execute his scheme. Righter obtained and attempted to obtain numerous loans by using the fraudulent art and accompanying fraudulent provenance documents.

Righter also admitted that he included a false W-2 and a false donation of fraudulent art to a charity on his 2015 federal income tax return, which resulted in him fraudulently receiving a refund of $54,858. He then signed and filed a false 2015 amended tax return, which claimed a false casualty and theft loss of $2,575,000 related to artwork he claimed had been stolen. The artwork was fraudulent and had no value; the bogus return resulted in false carryback loss refunds for 2012, 2013 and 2014, totaling $52,485.

Once he enters guilty pleas, Righter will face a maximum of 25 years in prison.

Righter also pleaded guilty to charges in Florida for an approximately $1 million attempted art fraud on the Miami gallery. Sentencing in that case is May 18.

Phoenix: Preparer Roberto De La O has pleaded guilty to preparing false tax returns.

De La O prepared some 118 fraudulent returns for tax years 2014 through 2017. On each return, he included a W-2 or 1099-MISC from a company called Red Home Investments that fraudulently included both Arizona and federal income tax withholding, inflating refunds.

Investigators discovered that De La O was the sole member of Red Home and were unable to find evidence that the company had paid the wages reflected. De La O admitted that he had never sent in the listed withholding.

De La O faces up to 30 months in the Arizona Department of Corrections or one year of jail. He will also be placed on up to seven years of probation and pay an $18,000 fine and will be responsible for paying up to $50,000 to affected taxpayers to reimburse costs to amend their returns and to cover any accrued interest on taxes actually due. Sentencing is May 15.

Chappaqua, New York: Businessman Antonio Nikc, 58, has pleaded guilty to tax evasion for the calendar years 2010 through 2014.

From 2010 to 2015, Nikc managed a number of family businesses that operate large rental buildings in New York and Connecticut. Nikc ran these businesses and managed his personal finances in a manner designed to conceal his sources of income and prevent the IRS from calculating or assessing tax due. Nikc treated the business entities’ accounts as his own personal ones, using them to pay for more than $1.5 million in personal expenses, including oceanside condominiums in Miami, marina fees, airline tickets, luxury cars, college tuition and allowances for his children, and purchases at jewelry stores, clothing stores and restaurants. He failed to file any personal federal income tax returns and failed to pay any taxes on the income.

Nikc took various steps to evade the taxes, including paying for personal expenses out of the family business accounts and intentionally maintaining few assets in his own name. He evaded $395,745 in federal income taxes.

One count of tax evasion carries a maximum of five years in prison. Sentencing is June 5. Nikc agreed to pay $395,745 in restitution to the IRS.

Cinnaminson, New Jersey: Preparer Gloria Valentin, 48, has admitted to helping clients file falsified returns.

Valentin, of Cherry Hill, New Jersey, pleaded guilty to an information charging her with one count of aiding and assisting in the preparation of false income tax returns.

Valentin owned, operated and approved all of the returns filed by GNG Business Solutions. She admitted that she prepared some 60 income tax returns for 27 tax clients during tax years 2013 through 2016. Those returns contained similar patterns of false and fictitious Schedule A deductions and unreimbursed employee business expenses. Those false expenses caused a tax loss of $201,896 to the government.

The charges to which Valentin pleaded guilty carry a maximum of three years in prison and a $250,000 fine. Sentencing is Sept. 8.

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