Accountants Behaving Badly: Tax Fraud, ‘Hopelessly Conflicted’ About Ethics, RICO Suave

Let’s see who made the news last week for conduct unbecoming of an accountant.

Westchester tax accountant sentenced for tax fraud [Patch]
Yorktown Heights, NY-based accountant Steve Sabba was sentenced to five years’ probation on July 18 after he pleaded guilty to third-degree criminal tax fraud and fourth-degree criminal tax fraud, both felonies, in February.

Steve Sabba

As part of his probation, Sabba must be monitored by an authorized tax professional in the preparation of tax returns.

Sabba, the owner of Tax Pro Financial Network Inc., evaded personal and corporate income tax by using credit cards in the name of a former employee in order to avoid detection by authorities, according to police.

Gambling accountant who embezzled S$41 million over a decade gets jail [Channel News Asia]
Ewe Pang Kooi, an accountant who embezzled a total of S$41 million ($30 million) over a decade, was sentenced to 25 years and 10 months in prison on July 16.

Ewe Pang Kooi

Kooi, 65, was “driven by an insatiable appetite for gambling,” said Justice Chan Seng Onn. To date, about S$24 million has not been recovered.

He had misappropriated the funds between February 2002 and July 2012 while holding three roles: as a liquidator of companies, as a receiver for the assets of a person, and as an agent to operate a company’s bank account. His thieving affected 21 companies where he acted as liquidator, including six subsidiaries of Hewlett-Packard.

Ewe, who was managing partner of accounting firm Ewe, Loke & Partners, moved funds between entities to cover up his misappropriation, but his scheme was uncovered when Hewlett Packard companies questioned him about assets from liquidation and he had to admit guilt.

Ewe bet large amounts of up to S$150,000 on games at casinos for a “kick” and used his clients’ funds to chase his losses.

Former accountant for Jersey’s regulator manages to avoid two years in prison [International Investment]
Accountant Timothy Owen Jones avoided jail time after pleading guilty of disclosing confidential documents he had access to as a employee of Jersey’s Financial Services Commission. Instead, he was handed a £5,000 fine to be paid over the next 10 weeks.

Jones worked for three years at the JFSC and took documents home with him. When he was dismissed, he presented the confidential files to his new employer Vistra as templates for future applications with the watchdog.

The new managing director of Vistra reported Jones to the regulator after he was made aware of the documents. Jones pleaded guilty to one count of disclosing information about Belasko Jersey without the company’s consent and faced up to two years in prison for the offence.

‘Hopelessly conflicted’ accountant struck off [New Zealand Herald]
David McPhedran was removed last week from the register of members of the New Zealand Institute of Chartered Accountants after being found guilty of professional misconduct.

David McPhedran

In a decision on Nov. 8, 2018, the institute’s disciplinary tribunal found McPhedran guilty of professional misconduct, conduct unbecoming an accountant, negligence, and breaching the institute’s code of ethics.

He had previously pleaded guilty to the breach of the code of ethics. The charges arose from complaints by former clients around the Your Business Team business that he co-owned, and an advisory and mentoring business that traded as 10X.

The tribunal found McPhedran was “hopelessly conflicted.” He furthered his own interests at the expense of two clients who came to him seeking objective, independent, and professional advice but ended up losing their businesses.

Tax preparer indicted for RICO violations [Suwannee Democrat]
Maribel Mireles, a tax preparer in Dalton, GA, was indicted by a grand jury on July 19 for violation of the Georgia Racketeer Influenced and Corrupt Organizations (RICO) Act.

Maribel Mireles

She had previously been arrested in 2017 and 2018 by the Dalton Police Department for computer forgery and making false statements.

Mireles, owner of Maribel’s Tax Service in Dalton, violated the law between Feb. 1, 2017, and May 14, 2018, “through a pattern of racketeering activity and proceeds derived therefrom …”

“The accused did meet with undercover police officers and prepare Georgia state income tax returns with false income tax deductions, by submitting false income tax deductions to the Department of Revenue of the state of Georgia and by submitting false income tax returns by computer submission, depriving the state of Georgia of revenue and United States currency, to achieve payment to the accused in the form of monetary compensation as a tax preparer … ,” the indictment said.

District Attorney Bert Poston said the RICO charge brought under state law will allow prosecutors and law enforcement officials to broaden the case if they deem it necessary.

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