Tax Fraud Blotter: Rocky roads | #phishing | #scams | #cybersecurity | #infosecurity | #hacker

For rent; lien on me; really creative; and other highlights of recent tax cases.

Syracuse, New York: Stephen Mockler, 53, of Waverly, New York, Andrew Panessa, 40, of Lake Ariel, Pennsylvania, and Sabrina Scott, 52, of Granbury, Texas, have pleaded guilty to charges related to their roles in a scheme to obtain confidential tax information from the IRS.

The three admitted that Scott, while an employee of a private investigation firm in Texas, provided both Mockler and Panessa with personal ID information about her firm’s investigative targets and requested that Mockler and Panessa use that information to obtain confidential tax information.

Mockler, who received requests for tax information from both Scott and Panessa, called the IRS and used the information to impersonate the taxpayer, answer the security questions and learn non-public information about the taxpayer. Mockler then sent that information back to Panessa or Scott, who provided the information to the private investigation firm’s clients for a fee.

Mockler and Panessa each pled guilty to conspiracy to commit wire fraud, wire fraud, misuse of a Social Security number and aggravated ID theft. Each faces a maximum of 20 years for each count of wire fraud and five years for each count of Social Security number misuse. Sabrina Scott pled guilty to conspiracy to misuse Social Security numbers and faces a maximum of five years. All three face fines of up to $250,000 and post-imprisonment supervised release of up to three years.

No sentencing date is set for Mockler or Panessa. Scott’s sentencing is Oct. 5.

Newark, New Jersey: Tax preparer Sylvain Dienhoue, of Tobyhanna, Pennsylvania, has been sentenced to 18 months in prison for helping clients file falsified returns that inflated refunds.

Dienhoue worked as a preparer at Cadi’s Multi Services in Newark, where he aided and assisted in the preparation of 44 fraudulent returns on behalf of clients for tax years 2014 through 2016. He used fabricated and inflated figures, including expenses and itemized deductions, to inflate refunds.

Dienhoue, also sentenced to a year of supervised release and ordered to pay $237,738 in restitution, is now precluded from preparing taxes on anyone else’s behalf.

New York: Anthony Riccio, owner of the Brooklyn construction business AD Custom Interiors Inc., has pleaded guilty to not paying payroll taxes to the IRS.

As sole owner and operator of AD Custom, Riccio had to account for and pay over federal payroll taxes owed by his employees. From approximately January 2011 through January 2016, he cashed more than $3.1 million in checks paid to AD Custom. He used some of that cash to pay wages to his employees, concealing these payments from the company’s preparer and causing the accountant to prepare employment tax returns that underreported wages and payroll taxes owed.

Riccio failed to pay $255,433 in federal payroll taxes.

Sentencing is Oct. 21, when he faces a maximum of five years in prison, as well as a period of supervised release, restitution and monetary penalties.

Jacksonville, Florida: Dennis Alexander Barahona, 38, of Chelsea, Massachusetts, has been sentenced to 18 months in prison for conspiracy to commit wire fraud and conspiracy to commit tax fraud.

Barahona established a shell company supposedly involved in the construction industry. He obtained a workers’ comp policy in the name of the shell company to cover a minimal payroll for a few purported employees. Barahona then “rented” the workers’ comp insurance to crews who had obtained subcontracts with construction contractors on projects in various Florida counties. Over the course of the scheme, Barahona rented the certificates to dozens of work crews.

The contractors issued payroll checks for the workers’ wages to the shell company; Barahona or a co-conspirator cashed these checks and then distributed the cash to the work crews after deducting their fee. The conspirators cashed payroll checks totaling some $4,388,371, with their fees totaling some $263,302. Neither the shell company nor the contractors reported to government authorities the wages paid to the workers, nor did they pay either the employees’ or the employer’s portion of payroll taxes. According to the IRS, the amount of payroll taxes due on wages totaling $4,388,371 was some $1.1 million.

Barahona, who pleaded guilty in March, was also ordered to pay $1,110,257 in restitution to the IRS and $41,352.91 to an insurance company. He was ordered to forfeit his interest in $230,764 that was seized from two bank accounts, and the court also entered a money judgment against him for $263,302, representing the proceeds of the wire fraud.

Hampton, Georgia: Tax defier Hakim Amal Archible, 29, has been found guilty of three counts of filing or attempting to file false liens against federal officials and one count of obstructing or impeding the due administration of the IRS.

In 2014, Archible received an IRS penalty letter for $5,000 for filing frivolous returns. In retaliation, he filed false liens against the former Secretary of the U.S. Treasury and the former IRS Commissioner. The liens were for $5,000 to $100 billion and named the federal officials as debtors and responsible parties for Archible’s financial liabilities. He also filed liens against Georgia officials.

Sentencing is Oct. 1.

Washington, D.C.: Mathew Reck, of St. Tammany Parish, Louisiana, has been found guilty of conspiracy to defraud the IRS.

From 2011 to at least June 2019, Reck conspired to defraud the IRS by underreporting his own and others’ individual incomes. With respect to his personal returns, Reck directed his co-conspirator accountant in emails to “get really creative with the 2012 taxes” and to “crush” his 2013 taxes. On his 2012 and 2013 returns, Reck underreported the income from his construction businesses and conspired to defraud the IRS by paying some workers off the books in cash, underpaying employment taxes and not reporting workers’ full compensation.

Reck caused a total federal tax loss of $1,017,024.

He faces a maximum of five years in prison, as well as a period of supervised release, restitution and monetary penalties.

Columbus, Ohio: Ice cream exec Timothy L. Miller of Gahanna, Ohio, has pleaded guilty to one count of wire fraud and two counts of filing a false income tax return.

From July 2015 through 2017, Miller was president of Big Drum USA LTD, an ice cream manufacturer. He fraudulently withdrew $1,797,127.49 from a Big Drum bank account, the withdrawals consisting of cashier’s checks made payable directly to casinos, debit card transactions involving hotels and casinos, and cash withdrawals in Ohio, Nevada, Utah, Iowa, Pennsylvania, California and Ontario, Canada. He concealed his actions by logging the transactions as “petty cash” or “loans” in the ledgers.

He also filed returns for 2016 and 2017 that failed to report the funds that he stole from Big Drum, which resulted in the loss to the IRS of $674,873.35.

Filing a false income tax return carries a maximum of three years and wire fraud a maximum of 20 years; both charges carry a fine up to $250,000. Miller will pay $674,873.35 in restitution to the IRS and $1,797,127.49 restitution to Big Drum.

Springfield, Illinois: West Kinioki Mpetshi, formerly of Jacksonville, Illinois, has been sentenced to 33 months in prison, to be followed by a year of supervised release, for filing false income tax returns and aiding in the filing of false returns.

Mpetshi immigrated from the Democratic Republic of Congo and soon after schemed to defraud the IRS of hundreds of thousands of dollars as a tax preparer by claiming false moving expenses and educational credits for himself and others on federal returns. He prepared returns for other local immigrants of the Congo who could not read or write English.

Convicted of 30 counts of tax fraud, he was ordered to pay $86,601 in restitution to the IRS and to pay the costs of prosecution in the case, which totaled $74,507.77.

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