The Tax Fraud Blog – Qui Tam Attorneys

Operators of the family business, Adams Beach Income Tax, are being charged with tax fraud of up to $15 million in damages after allegedly filing false claims on behalf of themselves and clients.

Father Alexander Adams and his two sons, Garrett Adams and Brandon Adams, promoted their tax fraud schemes through live seminars, CD’s and web advertising.

The fraud was built around claims of inflated tax refunds and fabricated income tax with-holdings. If the men are found guilty, they will face civil penalties and be barred from the tax industry in the future.

Former Internal Revenue Service (IRS) Officer Mark E. Hunt, along with three other Maryland men, has been charged in a Tax Evasion scheme. The scheme was orchestrated by Potomac attorney Irvin Catlett and totaled $1.2 million. Hunt worked as Catlett’s inside man and provided taxpayer information while using his position with the IRS to convince clients that the scheme was safe from prosecution.

Catlett has been charged with fraud, obstruction of IRS law, and 10 counts of aiding and assisting in the preparation of false tax returns. The scheme worked by absorbing the investments (supposedly in three car dealerships) of clients and then posting the dealerships as losses on the client’s returns, allowing the taxpayers to negate their taxable income because of the supposed “losses.”

Catlett faces up to 38 years in prison. Hunt faces up to 13 years for lying to an investigator and participation in fraud and the other three conspirators face up to 5 years each.

On February 24, 2010, the Justice Department announced that the Honorable Marcia Crone of the U.S. District Court for the Eastern District of Texas has permanently barred twelve (12) people from promoting an alleged tax fraud scheme involving false income tax credits. The twelve (12) are among thirty-two (32) defendants named in a civil injunction lawsuit who allegedly helped customers claim more than $30 million in false federal income tax credits designed for producers of fuel from non-conventional sources. A total of 23 of the 32 defendants have now been barred. The thirty-two (32) defendants include four (4) Certified Public Accounts, twenty-seven (27) tax preparers and one other individual.

According to the government’s original complaint, the tax fraud scheme involved claiming tax credits based on the purported recovery and sale of methane from landfills in Puerto Rico, Illinois, New York, Ohio, and Connecticut. The complaint averred that no methane was ever produced or sold and that the defendants allegedly created fictitious business records to falsely document the purported production and sales. The tax preparers allegedly sold interests in the fictitious methane production facilities to thousands of customers in at least fourteen (14) states across the country and prepared income tax returns for customers claiming tax credits based on the fictitious methane sales.

Former Havenwood CEO Karen Mason-Mueller pleaded guilty to tax evasion charges. Mueller admits to having used over $1 million of Havenwood’s resources to pay for personal expenses. Mueller used her access to finances at Havenwood, a skilled nursing facility in Milwaukee, to buy over $60,000 worth of jewelry, $150,000 worth of home improvements, $108,000 on vehicles for her family, and over $300,000 on personal expenses such as vacations and yacht club fees.

The financial mismanagement at Havenwood brought the facility under federal investigation. Reports of employee paychecks bouncing, patient neglect and Medicaid fraud brought the center to the attention of several Federal agencies. The Wisconsin Department of Health and Family Services moved to shut the facility down in Mid-2005, three months after Mueller and her co-owner stepped down from CEO positions.

For her tax fraud, Mueller will face up to 5 years in prison and fines of up to $250,000.