License to steal; roll the Tape; Kings and Queens and cons; and other highlights of recent tax cases.
Kansas City, Missouri: Tax preparer Bianca Cobbins, 42, has pleaded guilty to taking part in two tax frauds.
She pleaded guilty to two counts of making a false statement to a financial institution and five counts of aiding in the preparation of a false return.
Cobbins admitted that, in December 2019, she obtained personal information belonging to a victim, including the victim’s legal name, date of birth, Social Security number, address and credit score. Using this information, Cobbins obtained a fraudulent driver’s license containing the victim’s personal information and a photograph of another individual, Quanisha Capelton. Cobbins and Capelton then used the fraudulent driver’s license to apply for a checking account at a local financial institution.
After opening the account, Cobbins manufactured two fraudulent paystubs. The paystubs falsely indicated that the victim worked for a health care company in Kansas City and that the victim’s paychecks were directly deposited into the fraudulently opened checking account. Cobbins and Capelton used the paystubs to apply for a consumer loan at the above-mentioned local financial institution.
Cobbins admitted that the procurement and use of the victim’s personal information to commit fraud resulted in a loss of at least $36,128.32.
Quanisha Capelton was previously charged, convicted and sentenced.
Cobbins further admitted that for tax years 2018 to 2023, she knowingly prepared false federal returns aimed at fraudulently inflating clients’ refunds. In many instances, Cobbins attached fraudulent Schedules C forms to her clients’ returns that falsely claimed business profits and or losses to ensure clients received the maximum Earned Income Credit.
Cobbins admitted to preparing at least 55 false federal returns, resulting in an actual loss of at least $312,656.
Cobbins is subject to 30 years in federal prison for each count of making a false statement to a financial institution and up to three years in prison for each count of aiding in the preparation of false returns.
Naples, Florida: Businessman Alexis Garcia has pleaded guilty to conspiring to defraud the U.S. by operating an off-the-books payroll scheme.
Garcia conspired to operate an illegal cash payroll system for construction workers to avoid paying employment taxes to the IRS and to defraud workers’ comp insurance companies.
Between 2017 and 2019, he managed and directed the operations of Tape Drywall Services. Contractors entered into agreements with Tape Drywall to provide workers for various contracts and provided checks in the name of Tape Drywall for payment. Garcia and his co-conspirator would cash the checks and retain a small percentage as a fee. Garcia and his co-conspirator provided cash to the foremen who used the cash to pay the workers.
Garcia and his co-conspirator cashed more than 3,600 checks totaling some $28 million. They did not report the wages to the IRS nor did they withhold Social Security, Medicare and federal income taxes from those wages and pay them over to the IRS. As a result, Garcia caused a loss to the U.S. of more than $4.2 million. Garcia and his co-conspirator also defrauded workers’ comp companies by substantially misrepresenting the amount of Tape Drywall’s payroll. The misrepresentations resulted in substantially lower insurance payments.
Garcia faces up to five years in prison, as well as a period of supervised release, restitution and monetary penalties.
Burbank, California: Armen Muradyan, 60, has pleaded guilty to evading payment of more than $11.2 million in federal taxes by using a shill to illegally collect Medicare reimbursement payments made to his blood-testing company, and to fraudulently obtaining nearly $100,000 in pandemic-related business relief.
He pleaded guilty to one count of conspiracy to commit health care fraud, one count of wire fraud and one count of tax evasion.
Muradyan owned and operated a Burbank-based blood testing laboratory called Genex Laboratories. Medicare and bank records show that Medicare paid millions of dollars in reimbursements to Genex for blood testing. The reimbursements were wired to bank accounts in the name of an individual identified in court documents as “L.S.” — Muradyan’s long-time friend to whom Muradyan had offered to pay $2,000 per month to pretend to be Genex’s owner.
Muradyan told L.S. that he needed him to submit Medicare enrollment papers to Medicare on Genex’s behalf because Medicare had banned Muradyan from submitting claims.
L.S. and Muradyan opened bank accounts for Genex in L.S.’s name but which Muradyan controlled. L.S. neither owned nor operated Genex and visited the company’s Burbank office to collect his $2,000 monthly payment and to sometimes sign documents at Muradyan’s direction. Muradyan used the proceeds from the health care fraud conspiracy to pay the mortgage on a property he owned.
For tax years of 2015 through 2020, Muradyan instructed L.S. to report Genex’s financial activity on L.S.’s personal income tax returns using documents that L.S. provided to his own tax preparer. The documents purportedly showed that Genex had minimal net profit or was operating at a loss, meaning the company had little or no income tax liability.
For the same period, Muradyan submitted income tax returns that reported none of Genex’s financial activity as his own and that he averaged an income of $40,000 per year. In fact, Muradyan personally received and used millions of dollars in Medicare reimbursements to support his own expensive lifestyle.
Muradyan also did not file tax returns for 2021 through 2023.
In total, Muradyan’s unreported federal taxable income was some $23,915,762, resulting in a total federal income tax due of some $11,236,357.
In July 2020, Muradyan wired a false and fraudulent application for an Economic Injury Disaster Loan. Lying that Genex employed multiple people and generated $800,000 in income for the year 2019. Muradyan knew Genex employed no one and generated zero income for that year. The U.S. Small Business Administration wired $99,900 to a bank account Muradyan controlled. He then used the money for personal expenses.
Sentencing is Dec. 11, when Muradyan will face a maximum of 20 years in federal prison for the wire fraud count, up to 10 years for the health care fraud conspiracy count, and up to five years for the tax evasion count.
Ocoee, Florida: Tax preparer James Fednor Meristin has been sentenced to three years in prison for conspiracy to defraud the U.S.
Meristin and other conspirators operated a tax prep business, Kings and Queens Multi Services, between 2019 and 2023, which prepared and filed false and fraudulent tax returns for its clients. These fraudulent returns were designed to maximize client refunds by, among other things, claiming COVID-related sick and family leave credits for which the taxpayer was not entitled.
Because of the excessive returns generated for their clients, Meristin and his co-conspirators were able to charge and receive exorbitant fees for their tax preparation services, including as high as $20,000 per return. He also admitted to deficiencies and fraudulent items in his own returns.
Meristin, who pleaded guilty earlier this year, was also ordered to pay $2,338,675 in restitution to the IRS.
