It’s always fun when “You Can’t Do That” rolls around because it means that it is Friday and that I get to take a look at what people think they can get away with. This week starts off with a CPA, James Lee, from New York. Mr. Lee was tasked with handling the business returns of several restaurants in the area. That shouldn’t be too difficult, right? Report sales, expenses and remit sales tax and you are done! Well Mr. Lee thought it would be advantageous to prepare correct returns, show them to the client, and then file false returns with the IRS in order to pocket the difference of sales tax collected. Needless to say, one of the restaurants was audited and both sets of returns, the correct ones shown to the client and the false ones filed with the IRS, were discovered. Turns out, Mr. Lee pocketed over $100,000 and is now facing up to 15 years in jail.
Then we have Shacretta Williams, a 38-year old tax preparer from Ohio. Along with an accomplice, Ms. Williams filed over 250 false claims through a number of tax preparation firms. Each fraudulent return included some type of false credit that ranged from earned income to education credits. Not only were the refunds inflated, but Ms. Williams would then have the checks sent to her place of business and take a percentage of the refund from the client as an additional fee. This plan cost the IRS over $750,000 and cost Ms. Williams two years of her life.
Our final fraudster followed the typical inflated refund scheme, but the scope of his criminal activity is quite extensive. Komi Gbotcho filed over 1,300(!) false returns from 2011-2013 which resulted in phony refunds totaling $3.4 million. This means, on average, Mr. Gbotcho defrauded the government of roughly $1.1 million dollars a year! There are some criminals who attempt to fly under the radar and then there are criminals like Mr. Gbotcho, who go big or go home (or in this case, jail for a very long time).
Enjoy the Valentine’s Day weekend!