The Tax Fraud Blog – Qui Tam Attorneys

Michael Craig Cooper, a 55 year old man from Topeka, Kansas, was sentenced to 20 years in prison for Tax Fraud. Cooper is the founder Renaissance (The Tax People) and was sentenced on more than 70 tax fraud counts.

In addition to serving those 20 years, Cooper will also be required to pay $10 million in restitution to the United States Government to cover the extent of his fraudulent activities, as well as a forfeiture of about $75 million.

The case was decided in 2008 when a federal jury found Cooper guilty on 73 counts of tax fraud including mail fraud, wire fraud, money laundering and conspiracy.

As America files taxes, stories of tax fraud, evasion and scams begin to hit the press. Many Americans choose to have their taxes filed by a CPA, and are employed by companies that issue tax paperwork to each employee. Usually, these basic tax-season transactions go as planned. But, if you’re one of the individuals who has seen tax fraud first hand, you should report it today.

If you are having your taxes prepared by a professional who is behaving suspiciously or has tried to sell you on a scam to make more money by filing for losses you don’t have, make sure to report them. If your company has with-held information or asked you to lie to the government on your earnings, you could have a potential case. Our team of experienced attorneys can help you decide what the next steps should be.

As a whistle blower, you will receive a portion of whatever money the U.S. Government gains back in court proceedings. Do your country, fellow citizens and yourself a favor by reporting tax fraud if you suspect it. Berg & Androphy has handled many types of Qui Tam cases, including tax fraud. We’re more than happy to help you assess your potential case and decide what the next steps should be.

If you blow the whistle on fraudulent behavior, you can reap substantial financial rewards.

If you suspect tax fraud, contact Berg & Androphy using our online Qui Tam Form today!

According to press release from government agencies, eight individuals from Florida, Oregon and the East Coast were recently convicted on charges of tax, wire-fraud and money laundering. The Justice Department described these individuals, who were working for the firm Pinnacle Quest International (also known as PQI and Quest International) as promoters of fraudulent tax and credit-card debt elimination schemes.

PQI was an umbrella organization for many tax and credit-card debt elimination schemes. The individuals convicted were perpetrators of the scheme, working on the executive council, and in PR and other positions.

Sentencing is scheduled for July 9th. Leaders of the scheme could receive up to 30 years in prison and fines of $1 million. Other defendants in the case will receive lesser penalties: a maximum of 5 years and $250,000 in fines.

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.

Three years ago, the Internal Revenue Service established an office that would allow whistleblowers to report information on big tax fraud scams and receive rewards. For the first time, it appears as if the IRS is paying out a substantial reward.

The Wall Street Journal reports that the IRS Office paid $5.5 Million in reward money to a whistleblower who reported tax fraud among several companies. More money is still possible as the IRS continues to investigate and resolve claims involving the accused companies.

The case began nearly eight years ago and involved international stock and tax fraud scenarios, completed in part by an international corporate conglomerate. It is reported that the case recovered over $60 million in unpaid taxes so far.

This award is the first major IRS payout to a whistle blower, but gives future whistleblowers and their attorneys confidence that the relatively new program is working, according to Dean A. Zerb, a former fraud investigator and key player in creating the new IRS office.

Tough economic times may lead to more tax fraud schemes. That is good news for tax fraud whistleblowers seeking to reap substantial rewards from a law enacted by Congress in 2006. This law requires the IRS Whistleblower Office to pay rewards to individuals who blow the whistle on persons who fail to pay the taxes that they owe the Government. The rewards range from 15% to 30% of the taxes, penalties, and interests collected by the IRS in the case. However, certain conditions must be met first. For example, the whistleblower only receives this monetary reward if more than $2 million is at issue in the case and the IRS actually uses the information provided by the whistleblower.

The process begins with the whistleblower filling out a Form 211, “Application for Award for Original Information,” describing the tax fraud that he or she knows about and attaching documents to support the allegations. All whistleblower claims must be submitted under penalty of perjury; therefore, individuals often seek the assistance of an attorney.

Concerns about retaliation for “snitching” are alleviated by the provisions of this law because the whistleblower’s identity, and even his or her existence, remains a secret and kept out of the public forever. This is quite different than in a qui tam case where the whistleblower’s identity is eventually revealed.

Once the form is submitted, the IRS evaluates the case and decides whether it is worth pursuing. The IRS keeps a tax fraud whistleblower in the dark about the progress of the case until it is closed, which could take years. Even after waiting for the IRS to successfully prosecute the individual who committed the tax fraud, whistleblowers should not expect to see their reward immediately because the IRS does not pay out the reward until the accused has exhausted his appeals and paid the owed taxes.