Don’t Be Like These People

Last week, we talked about the IRS Criminal Investigation unit, which just released their Fiscal 2012 report. That report was filled with the sort of dry statistics you would expect from an IRS annual report: 5,125 total investigations launched, 202 crooked tax preparers indicted, 199 identity thieves sent to prison, and 64 months average time behind bars for money launderers. But the report also includes dozens of stories of tax cheats who really just should have known better — and some whose stories are so entertaining we just had to share them. Are you having a bad day? Well, be glad you’re not one of these people!

• Michael Gerace owned Abbott Pizza in Buffalo, New York, where he cooked up delicious pizzas, calzones, and strombolis. He also cooked up a fake set of books for his accountant, shorting Uncle Sam about  500,000 pepperonis over three years. Now, instead of serving happy customers, Geraci is serving 21 months in prison. Here’s hoping the warden  recognizes his talents and assigns him to the kitchen instead of the  license plate shop!
• Miguel Vasquez was a tax preparer in suburban  Philadelphia. In 2008 and 2009, he prepared 1,654 fraudulent tax returns claiming fake deductions for fake business losses and applying for    fraudulent refunds. Bad move, right? As if that wasn’t bad enough, he  failed to report the income he earned from defrauding the government on his own tax return! Vasquez can look forward to 10 years in jail, plus a $1.6 million fine.
• Evelyn Wells and her daughter Cassandra Dean recruited friends and family to file false tax returns using fabricated W-2s reporting fabricated employers and fabricated withholding amounts. Those co-conspirators then claimed very real cash refunds. Wells drew a year and a day in prison, while her daughter drew 21 months. We’re all for  “family values.” But this hardly seems like the sort of activity you want to share with the kids!
• Veronica Dale worked for a company that serviced Medicaid beneficiaries, where she stole personal information. She and various co-conspirators used that information to file over 500 fraudulent  returns and request $3,741,908 in tax refunds. Dale drew 334 months in prison and a $2.8 million fine. Identity theft has become a top target for  IRS criminal investigators, but not everyone seems to have gotten that      memo.
• John Walshe owned Finzer Business Systems in Denver.   From 2005 through 2007, he withheld $912,286 in income tax and FICA contributions from his employees’ paychecks, but “forgot” to send it to the IRS. (He also stole $18,853 in 401k contributions, but who’s counting?)    Walshe was sentenced to 46 months in the hoosegow, where he’ll have a hard  time earning enough to pay his $1.3 million fine.
• Miguel Angel Trevino Morales and his brother Omar raised quarter horses at a farm in sleepy Lexington, Oklahoma (population  2,152). The farm turned out more than its fair share of winners, including one named Mr. Piloto who scored a million-dollar purse at Ruidoso Downs.   But the farm also turned out horses with curious names like “Number  One Cartel” and “Coronita Cartel.” It turns out (spoiler alert) that the brothers were laundering cash for Mexican narcotrafficantes.   Associates bought horses at auction, sometimes paying with duffel bags of  cash. Authorities indicted the Trevinos and seized over 400 horses worth $12 million.

Look, we know you want to pay less tax. But you don’t have to risk time behind bars to do it. You just need the right plan. The Tax Code is so complicated that there are actually more ways to save legitimately than there are to cheat. So let us give you the plan you need to save tax and sleep well, too!

 
Peter J Tarantino CPA
Tarantino & Company, CPAs
704 Macy Drive
Roswell, GA 30076

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