Frank A. Rubino , ESQ.

FEDERAL AND INTERNATIONAL CRIMINAL DEFENSE

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$160 Million Tax Fraud Case: Four Convicted For Helping

A federal jury in Miami convicted four men for helping carry out a $160 million tax fraud scheme. The defendants, two of whom are from South Florida, could face lengthy prison sentences for preparing falsified tax returns on behalf of their clients.

This federal tax fraud case has already resulted in four other convictions. The defendants apparently operated a business that helped wealthy clients submit false tax returns to receive larger refunds to repay obligations like student loans or mortgages. Prosecutors claimed that the defendants all knew about this and intended to help their clients get fraudulently large refunds.

While the prosecution has thus far focused on the tax preparers, they apparently only made a $750 fee on each tax return plus a portion of the refund. Since the government only accused them of preparing returns for 180 clients, those fees probably do not account for very much of the IRS's $160 million loss.

This suggests that the federal authorities will try to prosecute at least some of the 180 clients. Depending on the circumstances, prosecutors might try to argue that the clients were accomplices to the falsified tax returns. Under some state laws, a person can become an accomplice just by encouraging another person to commit a crime. Other states require a higher bar, only imposing penalties when a defendant helps the other person commit a crime. Usually, an accomplice is just as guilty of the crime as the person who actually committed.

If the government does bring cases against the clients in this scheme and can convict them as accomplices, those individuals could face serious consequences.

Source: Sun Sentinel, "Four convicted in $160 million tax fraud case," Wayne K. Roustan, Oct. 29, 2012; South Florida Business Journal, "Feds obtain four tax refund fraud convictions," Paul Brinkmann, Oct. 29, 2012

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Coral Gables Office

Frank A. Rubino, Esq.
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