19 Sep Recent Records of Tax Fraud Cases Fit for a King
A state auditor who reports spa treatments as business deductions. A tax preparer who hijacks his clients’ returns. A restaurant owner who pockets cash from fires and burgers. Here is the most recent record of extraordinary tax fraud cases across America.
Tacoma, WA: Troy Kelley
Troy Kelley is a former Washington state auditor who was able to steal almost $3 million from tax fraud in only five years. In 2011, he was convicted for possession of stolen property, two counts of giving false statements under oath, and six counts of tax fraud.
From 2003 to 2008, he managed a business that tracked real estate filings online. For those services, he received a flat fee of $15 or $20 for every real estate transaction report to escrow company customers. Another $100-$150 was paid by companies to cover expenses or refunds.
Kelley withheld all payments, and a series of class-action lawsuits were filed against Kelley from 2008. He was able to avoid all of them by falsifying claims and transferring the money to his investment accounts.
To avoid being caught, he then spent the stolen assets but filed claims for business deductions on personal expenses, like spa treatments and family trips, which landed him in prison.
Noblesville, IN: Daniel Bewley
Daniel Bewley is a 34-year old former preparer who was sentenced to 33 months in prison after “hijacking returns” from clients after a three-year tax scam.
Bewley would file return claims online on behalf of his clients, and report the claim to his clients on paper. But in fact, what he filed never matched the returns his clients received by the IRS, and he pocketed the difference.
Apart from the hefty prison sentence, he has also been slapped with over $330,000 for restitution.
Kansas City, MO: William Mack and Malaika Samantha Gilreath
The Gilreath couple pleaded guilty after failing to pay over $320,000 company taxes for their construction business from 2014 to 2016. Most of what they owed to the IRS were employment wage taxes.
The Gilreaths admitted to collecting $209,597 from FICA and income tax from up to 37 employees. After brought to justice, the court ordered them to repay $328,351 to the IRS together, and both William and Malaika received a five-year prison sentence each.
Salem, MA: John Kalantzis
John Kalantzis is the owner of King’s Roast Beef in Salem, who pleaded guilty to failing to report $855,000 returns to avoid paying $383,000. The sentencing hearing is October 2018, and he can expect to receive up to three years in prison, a $250,000 fine and one year of supervision after release.
From 2011 to 2015, Kalantzis reduced the federal income tax on his restaurant by avoiding to report exact amounts on receipts and expenses. He then kept the cash from receipts for himself and paid suppliers and even employee wages in cash to avoid taxes.
During each tax year, King’s Roast Beef didn’t report cash receipts of $275,000 and expenses of $115,000 on its returns.
These stories are a stark reminder of what happens to people when they end up on the wrong side of the tax law. Always be honest when filing your taxes and pay them on time. And if you need help handling the IRS, contact us at Golden Tax Relief to request a free consultation with our professional tax experts.