An irreverent Wall Street Blog
by Bill Singer
 
Join BrokeAndBroker blog on Facebook  Follow the BrokeAndBroker blog on Twitter  Connect with BrokeAndBroker on LinkedIn  Join Bill Singer on Google+  Subscribe to RSS Feed

Operation Brass Tax: IRS Cheats Nailed
Written: January 21, 2011

Since at least 2000, Lester Morrison, Paulette Bullock, Kevin Vaden, Gary Hanna, and Joy David, filed more than 7,500 tax returns (largely fraudulent) through a tax preparation business with locations in the Bronx and New Jersey. Those returns resulted in more than $28 million in fraudulent refunds. Morrison, described by prosecutors as the leader of the conspiracy, opened the tax preparation business in the Bronx, and later assisted in preparing tax returns at New Jersey locations. Morrison also conducted a class for his five co-defendants during which he explained how to prepare fraudulent returns.

Among the deceptive practices employed by the five defendants were

  • using stolen identities of deceased children to falsely claim them as dependents on clients’ returns;
  • claiming “business losses” from fictitious businesses;
  • claiming as deductions thousands of dollars in non-existent charitable contributions and miscellaneous job expenses;
  • falsely claiming credits for education expenses; and
  • falsely claiming credits for child-care expenses.

Each of the defendants earned inflated commissions and fees related to the fraudulent refunds. 

Morrison, 60, of New York, pleaded guilty on August 13, 2010, to one count of conspiracy to defraud the IRS, and one count of obstructing the administration of internal revenue laws. He faced up to eight years in prison, and agreed to make full restitution. On January 20, 2011, Morrison was sentenced in Manhattan federal court to 72 months in prison for his role in the conspiracy. He was also ordered to pay restitution of $17.3 million to the IRS.

Bullock, 51, of North Carolina, pleaded guilty on August 13, 2010, to one count of conspiracy to defraud the IRS, and one count of obstructing the administration of internal revenue laws. She faces up to eight years in prison, and agreed to make full restitution.

David, 28, of New Jersey, pleaded guilty on June 22, 2010, to one count of conspiring to defraud the IRS, and one count of obstructing the administration of revenue laws. David faces up to eight years in prison.

Vaden, 47, of New York, pleaded guilty on June 23, 2010, to a twenty-count Superseding Information charging him with conspiring to defraud the United States and to violate the tax laws; engaging in a scheme to obstruct the administration of the revenue laws; filing false and fraudulent personal tax returns; aiding and assisting in the preparation of false and fraudulent tax returns; and aggravated identity theft. Vaden faces up to 61 years in prison.

Hanna, 30, of New Jersey, pleaded guilty on July 14, 2010, to a four-count Superseding Information charging him with conspiring to defraud the United States and to violate the tax laws; engaging in a scheme to obstruct the administration of the revenue laws; making false statements to the government; and aggravated identity theft. Hanna faces up to 15 years in prison.

Defendants Bullock, David, Vaden, and Hanna are scheduled to be sentenced on various dates in January through March 2011.

Yabba Dabba Do

Among the jobs that I wish that I had was the one where you come up with all those clever names for miFred Flintstonelitary and law-enforcement operations.  Sometimes the results are funny.  Other times, well, to be as polite as possible, the effort is painful. 

Apparently, it wasn’t enough to simply launch a joint investigation of tax preparers by the U.S. Attorney’s Office and the Internal Revenue Service. No, the feds needed a catchy name. They came up with “Operation Brass Tax.”  Okay, not bad – frankly, that’s both clever and funny. 

In reading about the efforts of Operation Brass Tax, I note the self-congratulatory characterization that the operation was  the “largest coordinated takedown of corrupt tax preparers in history.”  Not just this week, month, or year but, impressively, in “history.” Of course, there was a time when brass wasn’t really manufactured – you know, the Stone Age, the Bronze Age and Iron Age periods of history. So, notwithstanding those several thousands of years before brass existed, Operation Brass Tax could reasonably argue its valid historical assertion for something like 3,000 or so years of more recent civilization. 

From what I understand, one of the earliest illegal tax preparation cases involved a Fred Flintstone, CPA, who was working for H&R Bedrock Tax Preparation Service, where he prepared the ancient Form 0001 (that was the precursor of the modern day Form 1040).  Flintstone was arrested and convicted for filing the return of a Bernard Rubble in which that client claimed improper deductions for a non-existent son, Dino. At the time of Flintstone’s conviction, the tax laws were literally carved in stone.

For one of the funniest takes in history on the government’s naming of operations, see this recent “Street Sweeper” column:

Also see these recent IRS stories from “Street Sweeper”:


 
[^top^]

Previous Entries
October 1, 2014
Ah yes, another fraud, another fraud coming out of Florida, another fraud involving inflated promises about a start-up company, and, for extra oomph, ... Read On
September 30, 2014
Stockbroker, Compliance, Legal, and Regulatory JobsEmployment Page BrokeAndBroker.com Jobs#wallstreetjobs @brokeandbrokerNOTICE TO EMPLOYERS... Read On
September 29, 2014
There's something about the movie biz that attracts a lot of people. Hollywood. Box Office Stars. The whole glitz and glamour thing of the red carpet.... Read On
September 27, 2014
IRS Telephone Scam AlertSeptember 26, 2014It seems like every day brings us yet another warning about some telephone scam involving impersonations of ... Read On
September 26, 2014
It seems like every day brings us yet another warning about some telephone scam involving impersonations of government employees.  In the past, f... Read On
September 26, 2014
For the purpose of proposing a settlement of rule violations alleged by the Financial Industry Regulatory Authority (“FINRA”), without admitting or de... Read On
September 25, 2014
In recent years, the BrokeAndBroker.com Blog has published Federal Bureau of Investigation and the Internet Crime Complaint Center ("IC3") warnings ab... Read On
September 25, 2014
Ah yes, the old "loss of confidence" explanation for terminating a Wall Street employee. Now there's a reason for termination that garners more than a... Read On
September 24, 2014
Lawyers often tell their clients to "get it in writing." The old legal joke is that a written contract is worth the paper it's written on. None of whi... Read On
BrokeAndBroker.com Job Search
Related Topics
Tag Cloud
Internet FINRA Bear Stearns Bloomberg SEC NASD NYSE Money Laundering Due Diligence Waiver Forbes China Chepucavage Broy Woody Allen Madoff NAC NPR Marketplace Stanford UBS Ketchum Antitrust NASDAQ RRBDLAW Schapiro Bill Singer BrokerAndBroker USERRA Brokeandbroker.com Morgan Keegan Arbitration Counterclaim BrokeAndBroker.com Khuzami BrokeAndBroker Aleynikov Goldman Sachs brokeandbroker Promissory Note U4 Bill SInger EFL CFTC Huffington Post Flash Crash arbitration RBC RRBDLAW.com Ponzi Affinity Fraud Wachovia Raymond James BrokeandBroker.com Expungement Fraud Securities Fraud Outside Business Activity Registered Rep Magazine FOREX BrokerAndBroker.com FBI Banc of America Pro Se Supreme Court Morgan Stanley Smith Barney E*Trade Margin email Galleon Penson U5 Defamation Protocol Wells Fargo Punitive Damages Citigroup Merrill Lynch ARS Employee Forgivable Loan Street Legal Morgan Stanley AWC Fidelity Bankruptcy Broke And Broker HFT David Sobel Day Trading Ameriprise Commissions Spouse Schwab Commission CRD Kenneth Starr IRS CNBC Complaint ATM Skimming Hacking Phishing Malware Naskovets Poteroba Koval Lincoln Financial Selling Away Outside Business Activities Rakoff 2nd Circuit Second Circuit IRA 401k Forgery Tax RRBDlaw.com Email Netschi Moore Whistleblower Street Sweeper Tran Bharara Facebook Online Severance Bonus Eligibility Rule TD Ameritrade Hedge Fund SAC 1099 Smith Barney Lehman Brothers IC3 Scottrade Lehman JPMorgan Chase Hertz Insider Trading Bank of America Department of Justice Elles Bribe Auction Rate Securities Raiding Spam Edward Jones Medicare Diabetes Dow Schumer Walter Bid Rigging Real Estate Discrimination Wall Street Statutory Disqualification Form U4 Form U5 Indictment Boyland DOJ Corruption bill singer FTC Do Not Call FINRA Arbitration Costa Rica Settlement LIBOR Varney Plea Rule 8210 RRBDlaw Appeal Fowler LPL Johnson US Airways Reg D MSSB Vault Loan SunTrust Discovery Employment Rosenthal Recruiting Lawyer Trading Platform JP Morgan Employment Tuesday Wrongful Termination Bank Guarantee WaMu Solicitation REIT Martin Credit Cards Away Account Credit Repair PN Advisor Placement Group Forex Mortgage Private Placement Moon Merrill Anderson Exam Lee Borrowing Tax Lien Conversion Oppenheimer Wedbush Felony Misdemeanor Expenses ING Lien OTR Estate Jobs Florida Credit Card Elderly Flash Drive Annuity Reimbursement FNMA BrokeAndBroke TIC DWI Promissory Notes Suitability Will POA Power of Attorney Casino NSF MF Global Counterfeit Preet Bharara Corzine Hacker RIA Prison Disclosure NASAA Aguilar FCPA Subway Identity Theft Gold Dell Bar Injunction Bank Deutsche Bank Hospital God HSBC Private Placements Eric Stein Wire Fraud CCO Joshua Brown Backstage Wall Street Obstruction of Justice Reuters Retaliation Variable Annuity Arbitraiton Outside Account Options Telephone Wine Social Media ADA Pacifico Non-Prosecution Agreement Confirm Tax Fraud Retirement OBA Equity Indexed Annuities EIA MetLife Continuing Education OIP Tax Liens Willful CE Unregistered Impersonation Annuities BBVA Business Expenses ETF JOBS Act Mail Fraud Parking Variable Annuities Signatures BitTorrent Impersonator Wire Transfer Wire Crowdfunding Nasdaq Away Accounts WSP Laptop Dodd Frank Checks RMBS AML PST Solicited Unsolicited Congress SRO Wife Discretion Non-Solicitation Restaurant Commodities Private Securities Transaction Offer of Settlement Money Market employment jobs Great Recession Chase Investment Services Arrest Barclays Liens Failure To Supervise Apple Time And Price T&P Willfully Husband Letter of Authorization LOA Sexism Debit Card Knight Test Practice Sale Unfair Competition Signature Judgments Undisclosed Settlement Trainee Fee Trust Laser Side Bar Mattera Female Sales Assistant Kennedy Charge Sexist NML Argentina Embezzlement Silver Judgment Bank Fraud Deceased TSSB Mary Jo White Trustee Frumento Conspiracy 6th Circuit Proctor Rule 3040 Class Action Beneficiary NYAG Schneiderman Gallagher White Self Regulation Short Sale Compromise Website TRO Supervision Vacatur SDNY BrokeAndBroker Bill Singer Piwowar Rule 1122 Article V signature VA Regulation SP Rule 3270 OWB Stockbrokers
 
Email Bill Singer Connect with Bill Singer on Facebook Follow Bill Singer on Twitter Link up with Bill Singer on LinkedIn Join Bill Singer on Google+