ATLANTA – With the extended tax deadline of July 15 for individual taxpayers quickly approaching, the U.S. Attorney’s Office urges caution. It is important to be aware of tax scams and to be compliant in filing and paying federal taxes timely. Tax cheats are becoming more sophisticated in their schemes and are finding new ways to cheat the system as well as gaining access to your personal and tax information.
“Criminals continue to victimize taxpayers with sophisticated tax fraud schemes,” said U.S. Attorney Byung J. “BJay” Pak. “Be honest, truthful, and timely in your tax filings, and beware of others who look to take advantage of you and the tax system.”
“Those taxpayers who file accurate, honest and timely returns can be assured that the government will hold accountable those who don’t. As we approach the end of the tax filing season, those who might consider preparing false tax returns should be aware of the extremely negative consequences as evidenced today,” said James E. Dorsey, Special Agent in Charge of the Atlanta Field Office. “The convictions and sentencings outlined below emphasize that the Internal Revenue Service and U.S. Attorney’s office will continue their aggressive pursuit of those who would attempt to defraud America’s tax system.”
The U.S. Attorney’s Office for the Northern District of Georgia, along with agents of IRS-Criminal Investigation and other law enforcement partners, actively investigates and prosecutes tax fraud and combats criminals willing to steal identities and commit tax fraud on the unsuspecting public. Over the past year, multiple tax investigations were charged and resolved. The following are highlights of some of those cases:
- Larry Scott. Scott was sentenced to two years in prison for failing to disclose to the City of Atlanta that while he served as its Director of Contract Compliance, he also served as the business manager for a consulting firm seeking contracts in the Atlanta-metropolitan area. Scott also failed to report on his taxes the majority of the income earned from the consulting firm.
- Thomas Holmes. Former tax preparation business owner Thomas Holmes pled guilty and was sentenced to three years, one month imprisonment for preparing and filing hundreds of fraudulent federal tax returns between 2011 and 2019. In total, Holmes defrauded the federal government out of more than $2.6 million. When preparing returns for clients, Holmes listed false Schedule C business losses and false Schedule A itemized deductions, causing taxpayers to claim millions of dollars in refunds that they were not entitled to. When the IRS issued those refunds, Holmes frequently kept a portion of the fraudulent refunds for himself and paid the balance to his clients. During the investigation, the IRS revoked Holmes’ e-filing privileges, but Holmes continued to file fraudulent returns through the mail.
- Allan and Stacy Spagnardi. Both Spagnardis were sentenced to four years, three months in prison after using their chiropractic clinic to commit healthcare fraud and for defrauding the Internal Revenue Service. Despite earning well over $1 million in personal income in 2014 and 2015, the Spagnardis failed to file federal income tax returns or pay federal income taxes for those tax years and instead took steps to hide their true income from IRS. After the Spagnardis were indicted, they continued to take steps to hide their income from the IRS, including by filing a false federal income tax return in early 2018.
- Vladimir Pierre a/k/a Jimmy Valentine. Pierre pleaded guilty to theft of government funds and aggravated identity theft. He admitted that between approximately January 2015 and April 2018, he filed over 150 fraudulent returns, a significant number of which involved the use of stolen identities, seeking more than $1 million in refunds. Pierre also admitted that as a result of his scheme he caused more than $340,000 in losses to the federal government. Pierre was sentenced four years, nine months in prison.
- Angela McBride. McBride pled guilty to filing a fraudulent, retaliatory lien against former IRS Commissioner John Koskinen. She was sentenced to one year in prison, with six months to be served in home confinement. After McBride filed a frivolous income tax return for 2013, the IRS notified McBride that she would be subject to a $5,000 penalty unless she filed a corrected tax return. Instead of filing a corrected return, McBride filed a lien with the DeKalb County clerk of court purporting to assign the $5,000 penalty issued against her to then-IRS Commissioner John Koskinen.
- Xiao-Jiang Li. On May 8, 2020, Li pleaded guilty to filing a false tax return, for failing to report foreign income earned in China as a Thousand Talents Program participant and researcher. From 2012 to 2018, Li worked at Chinese universities conducting research, earning at least $500,000 in foreign income that he never reported on his federal income tax returns. Li was sentenced to one year of probation and ordered to pay restitution in the amount of $35,089. He was also ordered to file lawful income tax returns for the years 2012 through 2018 within the first two months of his probation and fully cooperate with the Examination Division, Internal Revenue Service, in making a complete and accurate determination of all taxes, penalties, and interest that he owes.
- Don Terry and Jeffrey Smith. Terry and Smith pleaded guilty to Conspiracy to File False Claims against the United States. Terry and Smith were charged for their role in a tax fraud scheme in which numerous fraudulent and false individual and corporate income tax returns were submitted to IRS falsely claiming refunds. The refund checks were deposited into a bank account controlled by one of the co-conspirators for disbursement among the participants. Terry and Smith both entered a guilty plea to the conspiracy charge on January 27, 2020.
- Barbara Moore. Moore pleaded guilty on June 3, 2020 to a one count Indictment that charged her with Filing a False Claim Against the United States. Moore, who was a tax preparer at the time, submitted a fraudulent corporate income tax return that falsely listed a tax credit used to support the false claim for a tax refund of $104,046.
- Timothy Cobb. Cobb pled guilty to fraud and filing a false tax return. Cobb stole money from investors and then failed to report the stolen income on his federal income tax returns.
- Jo Ann Macrina. Former City of Atlanta Commissioner of the Department of Watershed Management Macrina has been charged with conspiratorial bribery, bribery, and tax evasion in connection with money and other items of value that she accepted from City of Atlanta and DeKalb County contractor Lohrasb “Jeff” Jafari. It is alleged that between June 2016 and September 2016, Jafari and/or PRAD Group paid Macrina $30,000 in four separate payments. She did not report any of these funds on her 2016 income tax return.
- Jim C. Beck. On August 14, 2019, suspended Georgia Insurance Commissioner Beck was charged in a superseding indictment with four counts of aiding in the preparation and filing of false federal income tax returns for the years of 2015 thorough 2018. According to the indictment, Beck’s tax returns for those years were fraudulent because they substantially overstated business expenses and substantially understated business profits associated with two of Beck’s businesses, Creative Consultants and GA Christian Coalition.
- Todd and Julie Chrisley. Reality television stars Todd and Julie Chrisley, along with their accountant, Peter Tarantino, were charged for conspiring to defraud the IRS. The Chrisleys are alleged to have taken steps to avoid paying taxes on the millions of dollars they earned while appearing on the television show “Chrisley Knows Best.” They were indicted by a federal grand jury on August 13, 2019.
- Luscious Mack. On November 12, 2019, a federal grand jury indicted Lucious Mack, charging him with 17 counts of filing false claims against the United States and four counts of theft of government money. The false claims charges stem from Mack allegedly filing fraudulent 1040 and 1040X Individual Income Tax Returns and fraudulent 1120 and 1120X Corporate Income Tax Returns. All the tax returns fraudulently claimed tax refunds to which Mack was not entitled. In all, Mack falsely claimed refunds totaling $860,483.
- Alfonzo Stevens. In May 2019, Stevens was indicted on one count of obstructing or impeding the IRS in connection with the collection of his outstanding tax liabilities. The indictment alleges that for more than half-a-decade, Stevens has been impeding the IRS’s collection through various methods.
- Bryan McElroy. McElroy was indicted on charges of attempting to file fraudulent, retaliatory liens against federal government officials.
- Leta Simmons. On July 13, 2020, Leta Simmons of Fairburn, Georgia, was charged with preparing fraudulent federal income tax returns. Simmons conducted a tax return preparation business through which she assisted clients with preparing and filing their returns. On behalf of her clients but without their knowledge or consent, Simmons filed multiple tax returns that unlawfully claimed false business losses and false itemized deductions, resulting in greater tax refunds. Many of Simmons’s clients did not even own or operate businesses. The IRS-CI investigation revealed that Simmons had filed multiple fraudulent returns for the tax years 2013-2017, resulting in a loss to the IRS in excess of $350,000.
Members of the public are reminded that the indictments only contains charges. The defendants are presumed innocent of the charges and it will be the government’s burden to prove the defendants’ guilt beyond a reasonable doubt at trial.
