Owner of tax prep businesses indicted for fraud
From Illinois Business Journal news services
EAST ST. LOUIS – Stephen R. Wigginton, U.S. attorney for the Southern District of Illinois, announced today that Eyob Tilahun, the owner of a local tax return preparation business known as “Tax King,” was indicted on charges of conspiring to submit false claims to the United States government and aiding and abetting the filing of false tax returns.
Tilahun owned and operated several Tax King locations in St. Louis and East St. Louis.
According to the indictment, Tilahun and co-defendant Mason B. Richmond trained Tax King’s return preparers on how to increase their customers’ refunds by falsifying certain information on their tax returns. The false information that was allegedly placed on the returns includes:
– False business income and Schedules Cs which caused the clients to qualify for larger Earned Income Credits;
– False wages, which again caused the clients to qualify for larger EICs;
– False education expenses, which enabled the clients to qualify for American opportunity education credits; and
– False information regarding fuel taxes that qualified the clients for federal fuel tax credits.
The indictment alleges that Tilahun and Tax King profited by charging its clients fees which ranged from approximately $400 to $650. The indictment states that the return preparers also profited by requesting cash “tips” from the clients that ranged from approximately $100 to $1,000.
“Every American citizen is harmed when false tax returns are filed seeking fraudulent refunds,” Wigginton said. “My office will continue to aggressively prosecute the tax cheats who engage in these types of schemes.”
Tilahun was arraigned on Monday at the Federal Courthouse in East St. Louis. A detention hearing was to be held Tuesday (today) to determine if he was to be released on bond. Richmond was also arraigned yesterday in East St. Louis. Richmond was released on bond.
On January 22, 2015, five of the return preparers who worked at the East St. Louis location were indicted on federal tax charges. The return preparers who were charged are: Edric A. Russell, Lakesha R. Wilson, Melissa L. Wiley, Tanesa L. Beverly, and Pierre J. Carter. Beverly and Wiley have both pled guilty. The charges against Russell, Wilson, and Carter are still pending.
The charge of conspiring to submit false claims carries a maximum sentence of 10 years of imprisonment, a $250,000 fine, and restitution. Each charge of preparing false income tax returns carries a maximum sentence of three years of in federal prison and a fine of $250,000.
The investigation is being conducted by agents from the Fairview Heights and St. Louis offices of the Internal Revenue Service – Criminal Investigations. The case is being prosecuted by Assistant United States Attorney Scott A. Verseman.
An indictment is a formal charge against a defendant. Under the law, that charge is merely an accusation and the defendant is presumed innocent unless proven guilty.
