While I’ve been gone for the last two weeks, I collected many stories about tax fraud. Here are just a few of them (if I included all of them, it would fill many pages of this blog).
Two members of a former Florida advertising agency pleaded guilty to conspiracy in a $1.5 million tax fraud. Michael and Michelle Cragan created bogus invoices, with the money mainly going to a third individual, Douglas Haase. Unfortunately for all concerned, the phony invoices were included on the business’ tax return. And with Mr. Haase receiving $1.5 million that wasn’t included on his tax return, we’re not talking peanuts here. Mr. Haase previously pleaded guilty. All are looking at spending time at ClubFed when sentenced (plus restitution).
>From Dickson City, Pennsylvania comes the story of Thomas Winnicki and his company Keystone Employee Benefits, Inc. He was in the employee leasing business. So far, so good. His clients paid him over $1 million for employment taxes that he was supposed to remit to the government. But when the business was going through a downturn, he used the $1 million for personal expenses rather than turning it over to the IRS. He pleaded guilty, and will be spending 18 months at ClubFed, and must make restitution of the over $1 million. The $100 “special assessment” he must also pay is the least of his worries.
A father-daughter team is accused of not paying taxes on $3.1 million of income. From Holmdel, New Jersey comes the tale of Anthony Ambrosia and his daughter, Lisa Derosa. The pair allegedly set up bank accounts in the names of children and other family members, and moved over $3.1 million into these accounts. They’re also accused of “structuring,” deliberately making deposits under the $10,000 federal currency transaction reporting limit. Mr. Ambrosia allegedly made numerous $9,500 deposits. His bank warned him about this, but he allegedly continued doing this. I suspect that the bank issues a Suspicious Activity Report (this isn’t mentioned in the news story but appears to be a reasonable conclusion), and the IRS and DOJ followed-up and discovered the alleged misdoings. If convicted, both Mr. Ambrosia and Ms. Derosa are looking at lengthy terms at ClubFed.
Finally, two tax “gurus” won’t be peddling their wares any time soon. I earlier reported about the convictions of Wade and Laura Cook. Wade Cook received 88 months—that’s 7 years, 4 months—at ClubFed. As Joe Kristan reported,
“Mr. Cook doesn’t seem to expect to appear before Judge Zilly again anytime soon:
Asked afterward to comment on the outcome, Cook remarked, “I’m not going to tell you that this judge is an a**hole. I’m not going to say that.”
Good thing he showed so much restraint.”
Joe also told the story of “We The People.” Robert Schulz had been enjoined from providing a tax scheme that caused employees and employers to not withhold from wages. Additionally, the “We The People” webpage must display the injunction. As of now, it doesn’t. Of course, expecting a member of the tax protester movement to comply with a ruling that would put him out of business (it’s hard to sell a product when the first thing potential clients would see on your webpage is an injunction against selling that product) isn’t a good bet. One last point: If you happened to be a customer of “We The People,” expect a visit from the IRS in your future. “We The People” is required to turn over its customer list to the government.
So it was not a good week to be a fraudster. And it was an especially bad week for tax protesters, as two of their champions discovered that there is an income tax, and you must pay it.