Accountants Behaving Badly: Jailed Over Ponzi Scheme, Firm Fined In Pot Bust, Embezzlement Admission

Plus, tax preparers plead guilty to preparing fraudulent returns, and the owner of a tax preparation business failed to file his own taxes.

Gambling accountant gets 14 years for $396M Ponzi scheme [Law360]
Texas CPA Jay Ledford will serve 14 years in federal prison for his supporting role in a Ponzi scheme that netted $396 million.

Jay Ledford

Ledford, 55, spent five years working with Maryland salesman Kevin B. Merrill on the scheme, pitching investors portfolios of defaulted consumer debt that they claimed would be profitably collected or flipped, Maryland U.S. attorneys said.

Ledford’s role in the scheme included creating fake documents, sales agreements, tax returns, portfolio overviews, collections reports, bank statements, and merchant account reports.

The two men were arrested in September 2018, and earlier this year both pled guilty to the lucrative long con in Baltimore federal court. Merrill was sentenced to 22 years in prison last month.

Accounting firm sentenced and fined $15,000 in connection with pot bust [Lewiston Sun Journal]
Leonardo & Co. was ordered to pay a $15,000 fine and forfeit $12,500 in U.S. District Court in Portland, ME, on Oct. 28 for failing to file cash transaction forms. The firm was also sentenced to one year of probation.

[I]n 2017, agents with the U.S. Drug Enforcement Agency and the IRS Criminal Investigation Division learned that Leonardo & Co. wrote four $12,500 checks to Brian Bilodeau, described as a member of a marijuana trafficking organization operating out of Androscoggin County in court records.

Court records show the checks written to Bilodeau were drawn on accounts associated with Leonardo & Co. and that the payments “did not involve a tax refund or payment for any services Bilodeau provided to the firm.”

“Instead, on each occasion, (Leonardo & Co.) exchanged the checks for $12,500 in cash,” according to the court records.

[S]ince the checks involved the receipt of more than $10,000 in U.S. currency, Leonardo & Co. were required by federal law to file a Form 8300, which they failed to do.

Bilodeau was one of more than a dozen people indicted on numerous felony drug charges stemming from federal raids on an illegal medical marijuana-growing operation in February 2018.

Accountant accused of embezzling more than $200,000 pleads guilty to charges [WCHS-TV]
Reneda Welch pleaded guilty on Oct. 28 to two counts of felony embezzlement for allegedly embezzling $203,000 from the city of Dunbar, WV.

Reneda Welch

Welch was arrested in April 2018 after Dunbar city officials told Kanawha County deputies they suspected the accountant was keeping deposits and embezzling the money.

So far, Welch has paid $50,000 back to the city.

Tucson tax preparer pleads guilty to preparing false tax returns
Adan Ramirez pleaded guilty on Oct. 25 to two counts of aiding and assisting in the preparation and presentation of a false tax return, according to a press release from the IRS Criminal Investigation Phoenix field office.

From April 2012 through March 2015, Ramirez, 36, prepared and filed 44 false individual federal income tax returns with the IRS for clients. Authorities said Ramirez used false and fraudulent claims for false wages, withholdings, dependents, Earned Income Credits, and Additional Child Tax Credits to obtain false and fraudulent tax refunds. The false and fraudulent claims resulted in a tax loss of $183,803, authorities said.

The false and fraudulent claims that Ramirez willfully filed on the federal income tax returns were filed to increase his client’s federal income tax refund amounts, to reduce their tax liability, and/or so that Ramirez would receive increased fees for income tax preparation. Ramirez intentionally omitted his name, signature, and a tax preparer identification number on the tax returns to conceal his identity as the tax preparer.

Ramirez agreed to pay restitution in the amount of $100,479. He will be sentenced on Jan. 17, 2020.

Owner of New Jersey tax return preparation business sentenced to prison for tax fraud [Justice Department]
David Patterson was sentenced to 29 months in prison on Oct. 28 for filing false tax returns on behalf of clients and failing to file his own tax returns.

Patterson, 38, who owned D&D Tax Service LLC, prepared fraudulent tax returns for tax year 2012 in which he knowingly falsified his clients’ medical and dental expenses, gifts to charity, and unreimbursed employee expenses, authorities said. At times, he took portions of his clients’ tax refunds and deposited them without authorization into bank accounts he maintained or controlled.

He also failed to file individual income tax returns for himself, and to pay federal income taxes, for 2013 through 2015.

In addition to his prison sentence, Patterson was sentenced to one year of supervised release and was ordered to pay restitution of $290,321 to the IRS.

Tax preparer pleads guilty to filing fraudulent tax returns [Justice Department]
Louisiana tax preparer Carlanda Allegra Isaac pleaded guilty on Oct. 29 to conspiring to defraud the United States with regard to tax returns.

Isaac, who worked for Pelican Income Tax and Bookkeeping Services LLC, located in Bridge City, LA, and Kenner, LA, and then later at Taxes by J.A.D.A. in New Orleans, falsified client tax returns to include false income, withholding, and education credits in order to fraudulently inflate clients’ tax refunds. Isaac charged a fee for preparing these returns, which was often deducted from the client’s refund, authorities said.

Isaac faces a maximum sentence of five years, three years of supervised release, restitution, and other monetary penalties.

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