March 11, 2002

OFFICE OF THE UNITED STATES ATTORNEY
SOUTHERN DISTRICT OF CALIFORNIA
San Diego, California

United States Attorney
Patrick K. O'Toole

For Immediate Release

NEWS RELEASE SUMMARY

Patrick K. O'Toole, United States Attorney for the Southern District of California, and Assistant Attorney General Eileen J. O'Connor of the Tax Division of the Department of Justice, announced that Jackie D. Brown, owner of Brown's Computerized Mobile Tax Services in San Diego, California, was sentenced to 310 days custody and three years supervised release for subscribing and filing a false 1997 Individual Income Tax Return with the Internal Revenue Service. Sentencing was imposed by the Honorable James K. Singleton, United States Chief District Judge (District of Alaska) (visiting judge). On October 18, 2001, Brown had entered his guilty plea before United States Magistrate Judge Larry A. Burns.

In sentencing Brown, the Court found that Brown had failed to report $94,816.25 in gross income for 1997 from his tax preparation business. Brown owed an additional $31,596.28 in income taxes on his 1997 federal income tax return due to the omitted income. Brown similarly did not report all gross income from his business for 1994, 1995, 1996 and 1998 on federal income tax returns for which he owed income taxes. The total omitted income for 1994 to 1998 was $385,383 and the tax due and owing was $119,542.88.

Brown, as part of his tax return preparation service, assisted clients in securing refund anticipation loans from a bank, and during this process, Brown obtained additional tax return preparation fees directly from the bank for his personal use without the knowledge or consent of his clients. The additional fees to Brown reduced the amount of the refund anticipation loan to the client, usually by $100.00 to $200.00 per refund. Brown, in effect, charged his clients twice for the same tax return preparation service, in that he had been paid once directly by the respective clients but also solicited and accepted a wire transfer fee from the bank for the preparation of the same tax returns. The additional income received for preparing the tax returns was not reported on Brown's 1994, 1995, 1996, 1997 and 1998 income tax returns.

In addition to the custody and supervised release imposed, Brown was ordered to pay his former clients restitution in the amount of $423,522 due to his fraudulent overcharging of return preparation fees. Brown was also ordered to enter into a payment plan with the Internal Revenue Service for all taxes and interest owed. Finally, Brown was ordered to not prepare an income tax return for anyone other than himself or an immediate family member while on supervised release.

Denise L. Rubin, IRS Criminal Investigation Special Agent in Charge for San Diego stated: "At this time of year when the American public is focusing on filing their tax returns, they should be careful when choosing a tax return preparer. While most tax return preparers provide excellent service to their clients, a few unscrupulous tax return preparers are involved in tax scams and ultimately defraud their clients. IRS Criminal Investigation serves the public by actively investigating those tax return preparers who defraud their clients as indicated in this case." Additional information on tax scams and abusive return preparers can be found on the IRS Criminal Investigation website at http://www.ustreas.gov/irs/ci.

DEFENDANT

Jackie D. Brown
San Diego, California

SUMMARY OF CHARGES

Title 26, United States Code, Section 7206(1), Filing a False Tax Return

Maximum sentence of three years in prison and fine not to exceed $250,000 per count.

AGENCY

Internal Revenue Service, Criminal Investigation