For Release: Immediate, Wednesday, April 10, 2013
Contact: Geoffrey Gloak, 518-457-7377
New York State Commissioner of Taxation and Finance announced today that multiple investigations into the filing of false state and federal income tax returns has resulted in the arrest and prosecution of several tax preparers operating in New York City and Long Island.
Investigations by the New York State Department of Taxation and Finance, in conjunction with local law enforcement agencies, allege that these preparers cheated New York State and the Internal Revenue Service out of millions of dollars in tax refunds.
One of the individuals convicted has agreed to pay the second highest penalty ever imposed by the Tax Department on a professional tax preparer -- $500,000.
"We must take every possible step to protect unsuspecting taxpayers from tax preparers who would endanger their financial well-being," said Governor Cuomo. "I commend the State Tax Department and local and federal law enforcement officials for their ongoing work to investigate and prosecute these individuals."
"These preparers - the few among the many - appear to have engaged in various forms of criminal behavior in order to obtain fraudulent refunds and reduce the amount of income taxes that their clients had to pay," said New York State Commissioner of Taxation and Finance Thomas H. Mattox. "Today's announcement sends a strong message that tax return preparers who willfully break the law will face severe penalties."
The Tax Department was joined in its investigations by the IRS and the offices of United States Attorney for the Southern District of New York Preet Bharara, New York State Department of Corrections Commissioner Brian Fischer, Bronx County District Attorney Robert Johnson, Queens County District Attorney Richard A. Brown, Nassau County District Attorney Kathleen Rice, and Suffolk County District Attorney Thomas J. Spota.
Those charged were:
- A New York City tax return preparer who pled guilty to filing 100 fraudulent tax returns - many of them with fictitious dependent information. He agreed to pay restitution of $608,722, including $108,722 in tax refunds and $500,000 in penalties - the second highest penalty ever imposed on a tax preparer in New York State. His name is being withheld due to the ongoing investigation.
- Sherrece Durrant-Gardner, of Hempstead, an employee of a tax service franchise located in Uniondale, Nassau County, pled guilty to using the personal information of jailed inmates, such as their social security numbers, to file fake returns and received more than $30,000 in phony tax refunds from the IRS. She was sentenced to probation for three years.
- Joseph Barrios, Jr., the proprietor of JB Tax, Inc., and William Barrios, the proprietor of the NY All Services Corp., are two brothers who worked as tax return preparers in separate businesses in the Bronx. Both were charged with failing to timely file their own personal and corporate income tax returns. In addition, Joseph Barrios, Jr. was charged with preparing and filing false personal income tax and sales tax returns on behalf of other individuals.
- Albert Adams, of Baldwin, owner of the Adams Tax Service, Queens Boulevard; also, Walter A. Cordero, Garden City, a partner of Albert Adams and owner of a related business, A&C Income Tax., Inc. - Adams pled guilty to Offering a False Instrument for Filing in the First Degree for filing false income tax returns and has agreed to pay restitution to New York in the amount of $150,000. Cordero pled guilty to Offering a False Instrument for Filing in the Second Degree and agreed to pay $100,000 in restitution.
- Mark Goldberg, of the Bronx, proprietor of E&M Multi Services, Inc., was arrested after a multi-agency criminal investigation. He was charged in connection with the filing of false personal income tax returns with the IRS and New York that resulted in the payment of more than $2.5 million in fraudulent refunds. He also was charged with wire fraud and falsifying business records. If convicted of all of the Federal charges, he could face a maximum sentence of 155 years in prison.
- Nicola Ciervo, of the Bronx, the proprietor of NAC Accounting and Consulting, Inc., pled guilty to preparing fraudulent sales tax returns for a person whom he thought to be a small business owner during an undercover operation. The fraudulent returns would have resulted in $38,000 in evaded taxes.
Protect yourself from tax preparer fraud
Commissioner Mattox also recommended steps for taxpayers to ensure they are not the target of fraudulent practices:
- Ask for a written estimate of all fees before hiring a tax preparer
- Never sign a blank or incomplete tax return
- Make sure your preparer signs the return
- Have your refund deposited directly into your bank account or sent directly to you on a debit card.
The Tax Department's "Consumer Bill of Rights Regarding Tax Preparers" - available free in several languages - includes additional information for taxpayers when hiring preparers.
Report tax evasion or fraud
If you suspect that a tax preparer is engaging in unethical or illegal practices, you can report it to the Department by calling 518-457-0578.