The United States Department of Justice has announced that a Houston woman has been sentenced to 12 years in federal prison after being convicted on 7 counts of aiding and assisting in preparing false tax returns.
U.S. District Judge David Hittner ordered the woman to serve 144 months (12 years) in federal prison, to be immediately followed by a year of supervised release (probation). In addition, she was ordered to pay restitution of $71,180, said U.S. Attorney Alamdar S. Hamdani.
Hamdani said the total sum the woman owes the United States from her criminal and civil cases is more than $1.9 million.
Investigators said she used some of the money from the scheme for cosmetic surgery and to purchase Bentley and Maserati automobiles.
According to KPRC Channel 2 at Click2Houston.com, the District Court heard evidence describing the woman as having a history of failing to pay her own personal taxes, along with having civil fraud penalties associated with that and penalties for failing to use due diligence in preparing tax returns.
The court also heard about violations of her conditions of release and failure to cooperate with pretrial services.
Assistant Special Agent-in-Charge Lucy Tan of the IRS Criminal Investigation’s (IRS-CI) Houston Field Office said the woman’s conviction was “for preparing fraudulent tax returns on behalf of her clients […] She criminally abused her role as a tax return preparer and violated the trust that the American taxpayers have bestowed upon her.”
Feds claim 100% criminal tax case conviction rate
Tan said her office has “a 100 percent conviction rate” for criminal tax cases over the past 2 decades.
The jury also heard from federal agents and from 5 of the woman’s clients at trial. Testimony and evidence indicated that persons paid her to prepare their tax returns from 2016 through 2019, even though she was not legally entitled to do so.
That’s because, by law, a paid tax preparer must have paid all of his or her own tax returns, and she reportedly did not pay her 2012-2017 tax returns until late 2019—after having prepared and filed other persons’ tax returns for a fee for years, according to investigators.
Authorities said the woman prepared at least 9 tax returns between 2016 and 2019 for which she created fake businesses that allegedly operated at losses. They also said the returns claimed:
- False fuel tax credits (only 0.2% of all taxpayers are eligible),
- State income tax deductions for Texas residents (who do not pay state income tax),
- False medical expenses,
- False unemployed reimbursement expenses,
- False contributions to charity, and
- Other false expenses for businesses.
She also allegedly charged tax preparer fees higher than those of other firms providing the same services.
Hamdani said evidence at trial showed that 98% of her clients received a refund, even though several owed as much as $25,000 and did not pay any income taxes.
The woman is in custody and will be taken to a U.S. Bureau of Prisons facility.
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Many white-collar fraud crimes can mean years in prison
Preparing fraudulent tax returns is just one of many white-collar fraud crimes that can lead to years in prison after conviction.
Such crimes are known as “white-collar” crimes because they don’t involve physical violence but rather are financially driven crimes involving lying, cheating and stealing. Such offenses can range widely from government and tax fraud to bribery, money laundering, embezzlement, and healthcare or Medicare fraud.
Other potential white-collar crimes can include:
- Compounding pharmacy fraud
- Identity theft
- Securities fraud and financial schemes
- Paycheck Protection Program (PPP) fraud
- Bank/mortgage fraud
- Conspiracy
- Intellectual property theft
- Counterfeiting
- Antitrust violations
- Wire and mail fraud
Houston’s Neal Davis Law Firm—which serves Harris County, Fort Bend County and Montgomery County—has years of experience defending the legal rights of persons accused of such non-violent, white-collar crimes.
In fact, the Neal Davis Law Firm has received consistent awards and honors for its work handling white-collar criminal defense. One such honor is from The Best Lawyers in America, whose peer reviews have placed Davis in the top 5% of white-collar criminal defense lawyers in America since 2015.
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Fraud crimes increasing in Houston
The incidence of fraud crimes appears to be rising in the Houston area and elsewhere—perhaps partly because of heightened vigilance and vigorous prosecutions by federal authorities who are trying to crack down on white-collar crimes.
Experian, a consumer credit reporting company, says the U.S. Federal Trade Commission received nearly 6,000,000 reports of fraud from identity theft in 2021 alone. That marked an increase of 19% over the previous year.
As for financial losses from such fraud, those losses rose at a much higher rate to above $6.1 billion in 2021. That was an increase of over 77% compared to the previous year.
Experian also has reported that nearly 50% of all recent business respondents have indicated that fraud is a high concern, while 90% considered fraud as a mid-to-high concern.
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Fraud, theft can bring severe penalties
White-collar crimes such as fraud or theft can be federal crimes or Texas crimes on a state level. Either way, they can bring severe penalties upon conviction.
For instance, in Texas, theft of $20,000 to $100,000 is a third-degree felony, which can lead to a prison sentence of 2 to 10 years and a fine of as much as $10,000.
Theft of $100,000 to $200,000 is a second-degree felony in Texas, and it can lead to a sentence of 2 to 20 years in state prison and a fine of up to $10,000.
A first-degree felony in Texas occurs with the theft of $200,000 or more. That can result in a prison sentence of 5 to 99 years—or life—and a fine of up to $10,000.
Get an experienced Houston fraud, theft defense attorney
If you or a loved one faces an accusation or charge of these or other white-collar crimes, you must get a knowledgeable, skilled and experienced defense attorney or lawyer to fight for your legal rights.
