News Releases
TAX CASES CONTINUE AS APRIL 15 DEADLINE APPROACHES
April 7, 2005
FOR IMMEDIATE RELEASE
David E. Nahmias, United States Attorney for the Northern District of Georgia and James D. Vickery, Special Agent in Charge, Internal Revenue Service Criminal Investigation Division, Southeast Area, announce the prosecution of several fraudulent tax return preparers and other criminal tax offenders in the Northern District of Georgia. With the tax deadline for filing tax returns rapidly approaching, federal officials today issued a warning to citizens, especially those in the business of preparing fraudulent tax returns, and those trusting their returns to tax return preparers, that federal tax authorities continue to dedicate resources to prosecuting those who assist others in preparing fraudulent tax returns. Recent prosecutions of tax return preparers include the following:
On April 5, 2005, a federal grand jury returned a 40-count indictment against RAE BEAVERS, 34, of St. Louis, Missouri, and JOSEPH MILLIGAN, 36, of New York, New York. They were both arrested on April 7, 2005, and are expected to make their initial appearance in Atlanta before the end of the month. The indictment charges BEAVERS and MILLIGAN with one count of conspiracy to file fraudulent claims for federal income tax refunds, thirteen counts of filing fraudulent claims, thirteen counts of identity theft, and thirteen counts of fraudulent use of other persons' Social Security numbers. The indictment alleges that, from February 2002 to January 2003, BEAVERS and MILLIGAN conspired with TERRENCE EDWARDS, 38, of Brooklyn, New York, to file fraudulent claims for federal income tax refunds. (EDWARDS was charged in the Northern District of Georgia in February 2004, and was sentenced on August 10, 2004, to 2 years, 6 months in federal prison for his role in the conspiracy.) According to the indictment, BEAVERS and MILLIGAN both worked at “Eye Consultants of Atlanta, P.C.,” where they copied the names, Social Security numbers and dates of birth of elderly patients without the patients’ knowledge or permission. EDWARDS then used this information to file fraudulent federal income tax returns on the internet. After filing each return, EDWARDS applied for a refund anticipation loan from Santa Barbara Bank & Trust. EDWARDS prepared these returns and loan applications on BEAVERS' computer. EDWARDS directed that the refund anticipation loan go to either his account or BEAVERS' account at Skylight Bank. BEAVERS stopped working at Eye Consultants of Atlanta in April 2002, and MILLIGAN left in June 2002. In July 2003, MILLIGAN began working at “Greenville Radiology, P.A.,” in Greenville, South Carolina. From Greenville Radiology, MILLIGAN compiled lists of elderly patients' names, Social Security numbers, and dates of birth, which he faxed to BEAVERS' residence and which EDWARDS used to file additional fraudulent income tax returns and refund anticipation loans. With BEAVERS' and MILLIGAN'S participation in the conspiracy, EDWARDS filed approximately 70 returns that falsely claimed refunds in excess of $200,000. The case is being prosecuted by Special Assistant United States Attorney Paul Jones.
On March 16, 2005, a federal grand jury indicted MELINDA MCGHEE, 36, of Riverdale, Georgia, in a four-count indictment charging her with making false claims against the United States, in violation of 18 U.S.C. § 287. The indictment charges that MCGHEE filed income tax returns, in her own name or the names of other individuals, which contained false information and fraudulently claimed refunds. The case is being prosecuted by AUSA Teresa D. Hoyt.
On March 3, 2005, DEBORAH L. THROWER, 51, and her daughter, SHASHONA P. PAYTON, 34, both of Stone Mountain, Georgia, were sentenced by United States District Judge Clarence Cooper on charges of conspiracy to commit tax fraud. THROWER and PAYTON pleaded guilty in October, 2004 to conspiring with one another to file false tax returns with the IRS in order to generate fraudulent tax refunds for their clients. THROWER and PAYTON operated a personal income tax return preparation service in Stone Mountain and later in Decatur, Georgia. For a fee, THROWER and PAYTON prepared federal income tax returns for their clients that were electronically filed with the IRS. In pleading guilty, THROWER and PAYTON admitted that they knowingly falsified their clients' federal income tax returns in order to generate a fraudulent refund by, among other things, falsely inflating the taxpayer's allowable expenses and deductions, and by falsely reporting the taxpayer's filing status, eligibility for dependent exemptions, individual retirement account contributions, student loan deductions, child care credits and expenses, and eligibility for the Earned Income Tax Credit. The effect of these false entries was to negate the taxpayer's taxable income, which, when combined with the taxpayer's withholdings, generated a false refund payment by the IRS.
THROWER was sentenced to 1 year, 9 months in federal prison, was ordered to pay $337,684 in restitution to the IRS, and was given 3 year term of supervised release. PAYTON was sentenced to a two year term of probation, with a special condition that she serve 6 months of the probationary term in home confinement. She was also ordered to pay $60,251 in restitution to the IRS. This case was prosecuted by Assistant United States Attorney Paul Monnin.
According to Nahmias and Vickery, tax return preparers are not the only persons being charged with tax crimes:
On January 4, 2005, a federal grand jury in Atlanta returned an indictment against ROBERT HALLOCK, 60, of Chicago, Illinois. The indictment charged that defendant HALLOCK willfully evaded and defeated the income tax due and owing by, among other things, failing to pay his income tax and filing a false and fraudulent income tax return in violation of Title 26, United States Code, Section 7201. The indictment alleges that defendant HALLOCK, an attorney, sold fraudulent certificates of deposit and used a sham business or nominee in the name of “Himmel & Grund, LLC,” for the purpose of hiding his true income. HALLOCK listed an individual other than himself as a partner and limited liability company member with Himmel & Grund, LLC and hired another individual to pay defendant HALLOCK’s creditors directly from the Himmel & Grund, LLC bank account. The indictment further alleges that HALLOCK stated that he had paid taxes on the monies disbursed to his creditors when, in fact, he had not. Assistant United States Attorney Susan Coppedge is prosecuting the case. The HALLOCK case has been transferred to Chicago for trial, pursuant to a statutory provision which allows a defendant to have the case tried in the district where the defendant resided at the time of the offense.
On March 28, 2005, ERIC LABRUNCE HOLLOWAY, 49, of Atlanta, Georgia, entered a guilty plea before United States District Judge Marvin H. Shoob on charges of tax evasion, in violation of 26 U.S.C. § 7201, and wire fraud, in violation of 18 U.S.C. § 1343. HOLLOWAY was indicted in the Northern District of Georgia on November 10, 2004 for tax evasion, and was charged with wire fraud in a Criminal Information filed in the Middle District of Tennessee on November 19, 2004. The wire fraud Criminal Information was subsequently transferred to the Northern District of Georgia and the cases were consolidated. The charging documents allege that from 2000 through 2002, HOLLOWAY made more than $745,000 in gross receipts from the sale of fraudulently obtained computer parts and equipment, and failed to file tax returns or pay income tax due and owing. HOLLOWAY did not pay the sellers for the equipment he purchased, and retained all sales proceeds.
HOLLOWAY then attempted to evade payment of income tax by failing to maintain books and records, dealing in cash, structuring cash transactions to avoid currency reporting requirements, and depositing money in the personal and business accounts of various girlfriends, and later requesting checks from the girlfriends, or writing checks from their accounts without their knowledge. Sentencing for HOLLOWAY is scheduled for June 9, 2005. This case is being prosecuted by Assistant United States Attorney Teresa D. Hoyt.
United States Attorney David Nahmias said of the cases, “Tax fraud knows no season. Diligent investigation by the IRS and aggressive prosecution of these cases goes on all year long and it will continue. Law-abiding citizens need to know that last minute tax preparation cannot and should not be a justification for criminal activity. The IRS and our office will keep working closely to make sure that all taxpayers do not pay even more because of those who don’t.”
James D. Vickery, the Special Agent in Charge IRS - Criminal Investigation said, "One of our aims is to foster confidence in the tax system and compliance with the tax laws. Honest tax paying citizens should not have to bear the burden of someone else's tax liability. People who are thinking about cheating on their taxes should think again, as these prosecutions demonstrate. Please remember that no matter who prepares your tax return, you are ultimately responsible for all of the information on the tax return.” Vickery advises that citizens can consult the IRS website for additional information:
Members of the public are reminded that the indictment contains only allegations. A defendant is presumed innocent of the charges and it will be the government's burden to prove a defendant's guilt beyond a reasonable doubt at trial.
For further information please contact David E. Nahmias, United States Attorney or F. Gentry Shelnutt, Chief, Criminal Division, through Patrick Crosby, Public Affairs Officer, U.S. Attorney's Office, at (404) 581-6016. The Internet address for the HomePage for the U.S. Attorney's Office for the Northern District of Georgia is www.usdoj.gov/usao/gan