Chief culprit; tag, you're it; trust them not; and other highlights of recent tax cases.
Springfield, Massachusetts: Christianne Mylott-Coleman, 55, former chief of staff to a former Massachusetts state senator, has been sentenced to 30 days in prison and a year of supervised release (the first 90 days in home detention) for filing false and fraudulent tax returns.
Between 2016 and 2020, she earned income from various employers, including companies involved in providing health care services, in addition to earning wages working for the senator between 2018 and 2020. Mylott-Coleman failed to report some $740,000 in income generated from a home health care business she operated; employees of that business were typically paid by Mylott-Coleman in cash. She also failed to report and pay to the IRS $269,209 in income taxes.
Mylott-Coleman, who pleaded guilty in 2022, was also ordered to pay the latter amount in restitution to the IRS.
Fort Worth, Texas: The Texas Second Court of Appeals has reportedly
Mason had faced five years in prison for submitting a provisional ballot in 2016, which was never counted as a vote, while on probation for a federal tax conviction for which she'd served prison time, reports said. She reportedly maintained that she was unaware of her ineligibility to vote in the election.
Insisting that Mason was the target of a Republican Party agenda pushing a narrative of rampant voter fraud, her attorneys told news outlets they will file a civil rights violations complaint on her behalf.
Great Falls, Virginia: Business owner Rick Tariq Rahim has pleaded guilty to tax fraud after failing to pay over federal taxes withheld from employees' paychecks.
From 2015 to 2021, Rahim, who owned and operated several businesses including laser tag facilities and an Amazon reseller, did not pay to the IRS the taxes withheld from his employees' paychecks or file the required quarterly employment returns. Between October 2010 and October 2012, he also filed two personal income tax returns on which he reported owing substantial taxes but did not pay the taxes due.
When the IRS tried to collect, Rahim submitted a 433-A that omitted assets that he owned such as a helicopter, a 2006 Bentley, a 2008 Lamborghini and local property. Some two weeks later, he transferred ownership of the property to his wife. He paid personal expenses from his business bank accounts, including more than $889,000 toward his mortgages and more than $669,000 to purchase or lease cars, including three different Lamborghinis. Rahim also withdrew more than $1.1 million in cash in amounts less than $10,000. He hasn't filed a personal income tax return since 2012 despite earning more than $34 million in gross income.
He caused a total loss to the IRS of at least $1,844,489. Sentencing is June 25.
New Haven, Connecticut: Danny D. Beeman, formerly of Connecticut and now a resident of Beverly Hills, Florida, has pleaded guilty to tax evasion.
Beeman claimed to be the originator and developer of computer software technology capable of compressing electronically stored data. In 2012, he and other individuals formed a Connecticut company, identified in court documents as "Company-A," to allow Beeman to develop the compression software.
From 2013 to 2017, Company-A paid Beeman some $316,000 to develop the software. During this time, he also submitted fake invoices to the company seeking reimbursement for computer-related equipment that he in fact never purchased; Beeman obtained some $2 million through these invoices.
In total, from 2013 to 2017 Beeman received some $2.3 million, all taxable income. He also had long-term capital gains income of some $1.5 million resulting from the sale of shares in Company-A.
Beeman never filed returns for any of those years, resulting in a tax loss to the IRS of some $1,054,032.
He faces up to five years in prison.
Charlotte, North Carolina: Tax preparer Zadih Cadyma, 66, has been sentenced to 30 months in prison, to be followed by three years of supervised release, for fraudulently obtaining $780,000 in COVID-19 pandemic relief loans and for money laundering.
From 2020 to 2021, Cadyma, owned and operated CFE Tax Services and other registered businesses, applied for 10 fraudulent COVID-19 loans from the Economic Injury Disaster Loans and three Paycheck Protection Program loans. On the applications, Cadyma lied about his businesses, including about gross revenues, monthly payroll expenses, the number of employees and other covered operational expenditures.
He fraudulently received $550,000 under the EIDL program and $230,000 in PPP loans. He used the money to support his lifestyle, including to purchase a new luxury vehicle.
Cadyma, who pleaded guilty a year ago, was also ordered to pay $762,952 in restitution.
(The IRS is investigating
Albuquerque, New Mexico: Victor Kearney, of Zephyr Cove, Nevada, has been sentenced to 27 months in prison and ordered to pay $1,188,645 in restitution after being convicted for filing false returns.
A federal grand jury indicted Kearney and his co-defendant Robert Fiser, of Albuquerque, in 2019. From 1997 to 2013, Kearney received some $16 million in income as lifetime beneficiary of two testamentary trusts established after the death of his first wife, Mary Pat Abruzzo-Kearney. These trusts were shareholders in Alvarado Realty Company.
At first, Kearney properly reported his trust income on returns prepared by a CPA. Then Alvarado restructured into a C corp with Subchapter S status, and corporate income, losses, deductions and credits passed to shareholders for tax purposes. Since the taxes Kearney owed to the government were no longer withheld by the company or the trusts, Kearney did not pay them. Instead, he conspired with Fiser, an attorney specializing in tax law and the preparation of federal income tax returns, to submit false tax returns from 2007 through 2011 showing little or no trust income.
Kearney, who owes the IRS $1,188,645, came to the attention of the agency in 2013 when he filed a lawsuit against his former brothers-in-law, Benjamin and Louis Abruzzo, claiming that they mismanaged Mary Pat Abruzzo-Kearney's trusts to Kearney's financial disadvantage. During the litigation, a judge heard evidence that prompted him to refer Kearney's case to the IRS for investigation. The state case was resolved in favor of the Abruzzos.
Upon release from prison, Kearney will also be subject to three years of supervised release.
Fiser pleaded guilty in 2022 to one count each of conspiracy and aiding and assisting in the preparation of a false and fraudulent return.
Houston: Tax preparer Lynettia Profit has been sentenced to a year and a day in prison, to be followed by a year of supervised release, for willfully preparing a fraudulent 2018 joint income tax return.
Profit, who operated JNL Tax Services, and her business executed a long-running scheme to claim false credits on her clients' behalf and evade IRS scrutiny. Between 2016 and 2019, she filed fraudulent returns for taxpayers, reporting false education credits and expenses to inflate refunds. In 2019, for instance, she prepared an income tax return that contained two false $2,500 education credits as well as $70,743 in false Schedule C expenses; the government suffered a tax loss of some $22,101. Profit also prepared a false return containing education credits and Schedule C expenses for an undercover agent in 2020.
The fraudulent returns resulted in a loss of at least $336,847 to the United States.
Profit, who
