Tax Fraud Blotter: Errors past and present

Accounting

Russian offensive; caught by the boss; the 30% solution; and other highlights of recent tax cases.

Lake Worth, Florida: Tax preparer Kasali Opabola Jr., 41, who failed to report his business income to the IRS, has been sentenced to 18 months in prison and ordered to pay more than $1.2 million in restitution.

Opabola, sole officer and registered agent of FTP Tax Solutions, grossly underreported his income from his business for tax years 2014 and 2015 and failed to file a 2016 income tax return. He failed to pay some $1,289,293 in federal income taxes.

Opabola previously pled guilty to two counts of filing a false individual income tax return and one count of failure to file an individual income tax return.

Philadelphia: Stanuslav Lukyantsev, a naturalized U.S. citizen from Kyrgyzstan, has pleaded guilty to his role in a conspiracy to use stolen identities to file thousands of fraudulent returns and send much of the illegal proceeds to conspirators in Russia.

Lukyantsev admitted that his conspirators filed fraudulent federal income tax returns using stolen identities. The returns claimed fraudulent refunds, which were deposited into accounts controlled by the conspirators at several banks in the United States. Conspirators went to ATMs and withdrew the proceeds of their scheme in cash that they then deposited into other bank accounts and wire-transferred much of the money to Russia. Lukyantsev maintained accounts at three different banks for this purpose.

Conspirators filed 7,167 false and fraudulent returns for tax years 2011 to 2016, claiming $11,178,361 in fraudulent refunds. The IRS paid at least $2,020,569 in fraudulent refunds, of which conspirators wire transferred at least $1,411,082 to bank accounts in Russia.

Lukyantsev admitted that he obtained $10,000 from the scheme, which must be forfeited to the government. He is subject to up to 20 years in prison.

Beaverton, Michigan: Tax preparer Mark Alan Patterson, 53, of Gladwin, Michigan, has been sentenced to 46 months in prison for wire fraud and tax evasion.

Patterson pleaded guilty in connection with a scheme to steal the refunds of more than 160 clients. He admitted to stealing more than $600,000.

Patterson worked as a tax return preparer for Schuster Tax Service and from 2015 until February 2020 stole portions of clients’ refunds by directing the money into bank accounts that he controlled. Patterson did not inform the clients that he was taking the money from their refunds, instead giving them unfiled versions of returns showing that they had a smaller refund.

In late February of 2020, the owner of Schuster Tax Service informed law enforcement that Patterson, her former employee, had engaged in a potential fraud. The owner discovered client returns dating back to 2015 that had refunds electronically diverted in part to Patterson.

Hands-in-jail-Blotter

Alexandria, Virginia: Quin Ngoc Rudin, a convicted felon, has pleaded guilty to wire fraud and to conspiring in a scheme to prepare false returns seeking millions of dollars of refunds from the IRS and the Paycheck Protection Program.

Rudin was the secretary, director and CFO of Mana Tax Services, which purported to be a tax prep business in the Los Angeles area. He conspired to commit two sets of frauds using Mana.

From May 2019 through his arrest in December 2021, Rudin and conspirators prepared and filed a series of fraudulent federal returns on behalf of at least nine professional athletes; the returns reported fabricated business and personal losses to get large refunds. Rudin and the conspirators represented to the athletes that Rudin was knowledgeable and experienced in the preparation of returns, and Rudin claimed that Mana could obtain large refunds for the athletes and that he had specialized knowledge that their prior CPAs and tax pros hadn’t.

Rudin helped prepare original returns for his athlete clients and filed amended returns for the past years to correct what he called “errors” by the athletes’ previous accountants. Mana then charged the athletes a fee of 30% of the amount of the federal refunds. The IRS paid refunds to the athletes totaling millions of dollars.

From April of 2020 through December of 2021, Rudin and his conspirators assisted small businesses in applying for PPP loans in exchange for a 30% fee. Rudin and his conspirators also prepared fraudulent PPP loans for business entities that the conspirators controlled. Part of the fraud involved grossly inflating the number of employees and monthly payroll costs claimed on the applications. Some of the businesses were not eligible for any PPP loan funds at all because they did not have any payroll expenses.

Rudin and his conspirators obtained millions of dollars in fraudulently obtained PPP loans.

The conspirators also submitted fabricated returns to support the loan applications. Some of the business owners never saw their loan applications before Mana filed them. Rudin and his conspirators directed the businesses to pay the fee with cashier’s checks and to note falsely on the memo lines that the funds were related to payroll.

Losses for the tax and PPP loan frauds total between $25 million and $65 million.

Rudin pleaded guilty to one count of conspiracy to defraud the United States and to commit wire fraud, as well as one count of wire fraud. Sentencing is Aug. 17, when he will face up to 20 years in prison for wire fraud and five years for conspiring to defraud the U.S. and to commit wire fraud.

Morton, Pennsylvania: Former tax collector Rosezanna Czwalina has been sentenced to a year in prison and a year of supervised release for tax fraud.

She pleaded guilty in June to five counts of filing materially false returns in connection with her efforts to avoid paying her taxes.

Czwalina, who had been the elected tax collector and treasurer for Ridley Township in Delaware County, Pennsylvania, from 2009 until her resignation in 2021, was authorized to retain, as a supplement to her income, fees paid for tax certifications and generation of duplicate tax bills. She failed to report those retained fees as income on her federal income tax returns for 2014 through 2018.

She was also ordered to pay $112,846 in restitution.

Jacksonville, Florida: Former Congresswoman Corrine Brown has pleaded guilty to trying to obstruct and impede administration of the internal revenue laws. 

Between October 2009 and October 2015, Brown caused her CPA to file individual income tax returns for tax years 2008 through 2014 that did not include income associated with cash deposits into her bank accounts. During the same period, Brown overreported her charitable giving by inflating total gifts to charitable organizations and nonprofit entities. She caused two local nonprofits to create letters that did not accurately reflect her donations so she could use those letters during an IRS audit.

Brown was previously convicted by a federal jury for various offenses; her earlier conviction was vacated on appeal.

She was sentenced in the latest case to time that she had already served (32 months and nine days) and ordered to pay $62,650.99 in restitution to the IRS.

Folsom, California: Businessman Zarko Danilov, 67, has pleaded guilty to two counts of making and subscribing a false return.

Danilov owned and operated Danilov’s Dental Lab. For tax years 2015, 2016 and 2017, he failed to provide his tax return preparer the bank statements for one additional business bank account and two personal bank accounts. During a civil audit by the IRS, Danilov lied to a tax examiner about only having one bank account for business and personal matters.

Danilov’s income for the three tax years was underreported by at least $1,271,694. The total amount lost by the IRS was some $283,359.

Sentencing is Aug. 25. Danilov faces a maximum of three years in prison and a $250,000 fine. 

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