Thomas Thorndike was a tax preparer in Waterbury, Connecticut. I use “was” because earlier this year he was sentenced to six years at ClubFed for cheating on his own taxes and for helping clients obtain refunds using false deductions. Here’s an excerpt from the DOJ press release:
If clients were audited by the IRS, THORNDIKE would provide them with blank Goodwill receipts as well as instructions as to how they should create a list of charitable donations that would correspond with the donation value THORNDIKE had entered on their returns. He also would direct his clients to create mileage logs that would support deductions he had entered for employment-related travel.
There’s plenty more in the press release to show that Thorndike was able to obtain over $1 million in refunds that clients weren’t entitled to. The Hartford Courant noted in its news story that Thorndike earned $12,000 a day by preparing a tax return every 15 minutes. But that’s not what this post is about; rather, it’s about ancillary damage that occurred.
Robert Liquindoli was one of Mr. Thorndike’s clients. I’ll let the DOJ press release take it from here:
In connection with [the investigation of Mr. Thorndike], the IRS requested to interview LIQUINDOLI, whose 2007 and 2008 tax returns had been prepared by Thorndike. After being contacted by the IRS, LIQUINDOLI sought to obstruct the IRS’s investigation by obtaining false documents that he intended to present to the IRS in support of deductions he claimed on his tax returns in 2007 and 2008. Between December 2011 and February 2012, LIQUINDOLI engaged in an effort to obtain false documents in support of false items on these tax returns, and lied to the IRS concerning the extent to which he possessed original and legitimate documents to support the deductions on his tax returns. LIQUINDOLI also falsely denied that he had attempted to obtain false documents to support those deductions.
A few years ago I represented a client of a Bozo tax preparer. My client (probably like Mr. Liquindoli) had phony deductions on his tax return. I explained to my client that you actually do have to spend the money in order to get deductions–my client had no idea of the law involved. My client didn’t lie to the IRS, didn’t obstruct the IRS, but did have to pay the IRS. Because my client cooperated and it was quite clear he did not know at the time his return was filed that he had done anything wrong, the penalties were waived.
Mr. Liquindoli was in a slightly different position. The one thing I haven’t mentioned (until now) is that Mr. Liquindoli is a former police detective. Presumably, he’s aware that it’s illegal to do what he did. Oops….
While Mr. Liquindoli faces up to three years at ClubFed, he’s likely to receive a much lesser term.