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Miami Tax Law Blog

Florida women sentenced to 2 years in prison for tax fraud

A Florida woman who was found guilty of tax fraud was sentenced on July 18. According to the report, the 41-year-old Gibsonton woman pleaded guilty on April 25 to receiving more than $43,000 in income tax refunds by filing fraudulent tax returns using the names of other people in 2011.

The prosecution stated that she would deposit the refund checks into her account. She would then withdraw the funds as soon as possible. She was sentenced to two years in federal prison. Once she is released, she faces one year of supervision. In addition, she also must repay more than $34,000 in restitution to the IRS.

One woman's case may be a warning to Florida residents

A 37-year-old woman was sentenced to 12 years in prison for her role in a tax fraud scheme that netted her $135,000. An investigation on the scheme, named Operation Zig Zag, was launched after VyStar Credit Union contacted authorities about irregularities in refund checks that had been cashed at the institution. The investigation began in May of 2012 and was a collaboration between the Secret Service, the IRS and the State Attorney's Office.

The Jacksonville Sheriff's Office was also involved in the case that spanned from Florida to New York. The scheme was named Operation Zig Zag because of the number of states where victims were impacted. According to reports, the woman would steal personal identification information from her victims and use that information to file phony tax returns. Bank and credit card accounts were also opened in the names of her victims.

Florida man agrees to plea agreement in alleged day trading fraud

A plea agreement in the case of a Tampa man accused of defrauding would-be investors holds that the man will pay restitution to his alleged victims; the man is the defendant in three pending federal cases in both criminal and civil court. The 34-year-old man and a conspirator allegedly offered investors the services of a day trading firm, attempting to attract investors with the promise of low fees. Federal authorities accuse the pair of defrauding customers out of $473,742, of which some $181,000 was withdrawn in cash.

According to prosecutors, the man and his conspirator would use social media to find potential day traders. The man would allegedly falsely represent himself as being in compliance with securities law and allegedly lied to potential traders about the success of his company. According to an SEC complaint, the man's conspirator told one customer that the firm had $15 million in day trading accounts on its books at time when the firm actually had less than $400,000 in accounts.

Importance of understanding willful and innocent IRS errors

It is important for Florida residents to recognize that there is a difference in potential consequences for innocent errors and willful wrongdoing on a tax return. Tax penalties may be more severe in cases of willful activity, and the potential for jail time may even exist. Experts use an amnesty program related to offshore banking as an example. This program is available to those who did not willfully err in reporting such accounts. However, a separate program would be used if the activity was purposeful.

The offshore account program for cases of willful activity is known as OVDP and requires the provision of eight FBARs as well as eight amended returns. In addition to paying taxes and interest, an individual in this situation must pay a 20 percent penalty. There is also a 27.5 percent penalty on the eight-year maximum value of an offshore account. In some cases involving specific banks, a 50 percent penalty may apply if an upcoming August deadline isn't met in reporting.

South Florida man faces prison time for Medicare fraud

On June 19, a South Florida man entered a guilty plea to charges stemming from a substantial Medicare fraud scheme. Authorities allege that the man acted as a patient recruiter in a scam that resulted in more than $200 million in fraudulent claims.

The South Florida man allegedly came to an agreement with the owner of a therapeutics firm that was at the center of the scam. Under the terms of this alleged agreement, the man would refer patients to the therapeutics firm in exchange for a kickback from the resulting Medicare money. According to court documents, the patients would receive unnecessary mental health services or no services at all. Many of these patients were residents of assisted-living homes. According to prosecutors, the therapeutics firm submitted over $430,000 in false Medicare claims related to the South Florida man's recruits.

IRS softens penalties for offshore tax evasion

A June 18 announcement by the IRS indicates that lesser penalties may be offered to those who come forward to disclose their hidden offshore accounts. According to the agency, approximately 6 million Americans live and work as expatriates. In many cases, these individuals are unaware of their requirement to pay taxes to the U.S. for foreign earnings. This may be helpful to Florida residents who previously earned income in other countries.

Rather than imposing tax penalties, the IRS will only require that back taxes and interest be paid. Prior to this, those coming forward were required to pay 27.5 percent of each foreign account that was not properly disclosed.

South Florida hedge fund advisor charged with fraud

A civil lawsuit has been brought against the founder of a hedge fund advisory firm and against his company by the Securities and Exchange Commission. It is alleged that investors have been defrauded of more than $17 million. The suit claims that this occurred as the money in question was transferred to another company that is involved in consultation and investment. There was reportedly no disclosure to investors. An additional issue in the fraud case is that the information about the transaction was allegedly hidden from accounting documents.

According to the SEC, the founder of the company and others received collective payments of $750,000. The organization also claims that $3.5 million of funds belonging to investors were used to pay a loan from a different hedge fund that the company managed. It is reported that all defendants have agreed to a settlement related to returning the ill-gotten funds. However, the suit will continue as the court makes decisions about additional penalties.

Sentence handed down in $9 million fraud case

In a case that some Florida taxpayers may find interesting, a military officer received a sentence of 42 months in federal prison for allegedly scamming $9 million in supposed training funds. He entered a guilty plea in December 2013 to money laundering and disclosing confidential information to a company seeking a government contract. The U.S. District Court in Salt Lake City also determined he would need to follow his sentence with three years of community supervision, which was delayed until August 4. The Internal Revenue was one of the agencies that investigated the case.

Authorities confiscated more than $1.6 million from eight separate accounts, 400 gold coins weighing 1 ounce each, a Jaguar, a Hummer, a boat and 16 pieces of real estate from the 51-year-old man. A co-defendant in the case reportedly earned more than $17 million during the term of the contract and was scheduled for sentencing on June 23 by the same Salt Lake City court.

Charges filed in Florida convenience store's tax refund scam

Federal prosecutors have charged several Florida residents in a fraudulent tax refund scheme that allegedly surrounded a Winter Garden convenience store. The couple that runs the store has been accused of knowingly buying and cashing fraudulent refund checks through the store's check-cashing service. The pair allegedly charged approximately half the checks' face value to cash them and ultimately cashed over $20 million, according to IRS agents.

Court records indicate that authorities had opened investigations into the convenience store as early as August 2010. Federal agents who searched the store in November 2012 reportedly discovered a safe containing approximately 185 checks valued at over $1 million. The husband and wife have each entered plea agreements and now face up to 10 years imprisonment for theft of government property.

Florida man sentenced in tax fraud case

A Polk County man was sentenced to serve seven years in federal prison after pleading guilty in a tax fraud case. The 50-year-old man entered a plea of guilty to one count of aggravated identity theft and one count of conspiracy to commit wire fraud on March 7. He will also be required to forfeit the $325,886, which the U.S. Attorney's Office for the Middle District of Florida identified as the proceeds of the fraud scheme, as well as the $14,952 seized from his home in 2012.

The Polk County Sheriff's Office collaborated with federal agents in an investigation into the man and his alleged co-conspirators in 2012, and 24 people were eventually detained. According to court documents, the man and his co-conspirators used stolen names, social security numbers and birth dates to electronically file fraudulent tax returns and receive tax refunds in 2011 and 2012.

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