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If you visit our tax law blog on a regular basis, you already know that we often profile criminal tax cases – and their frequently devastating outcomes for defendants. In December, for example, our criminal tax defense attorneys profiled Mohamed Mansaray, former owner of a Philadelphia tax preparation business known as Medman’s Financial Services. Mansaray, who was investigated and charged along with 10 additional co-conspirators, was sentenced to a decade in prison for his role in a tax fraud scheme that involved using the stolen identities of foster children in order to help clients claim credits and exemptions for which they were ineligible. We now have updates on one of Mansaray’s business partners, 44-year-old tax preparer Musa Turay – the last among nearly one dozen defendants to face criminal sentencing for a scheme which began as early as 2013.
It may jog your memory to revisit our previous article discussing the felony tax fraud charges against Mansaray and his co-conspirators. However, to quickly provide an overview of the case’s salient points, various workers at Medman’s, a Philadelphia tax preparation business, were indicted on multiple counts of tax and “white collar” (financial) crimes, including conspiracy, “aiding and abetting the preparation of false federal income tax returns, wire fraud, and aggravated identity theft.” The identities in question were stolen from hundreds of foster children, enabling various clients to claim tax credits and exemptions for which they would otherwise be unqualified. While clients at Medman’s benefited by claiming childcare-related credits and exemptions – receiving tax refunds which were in some cases, as one press release from the Department of Justice (DOJ) noted, “in excess of $9,000” – Medman’s staff benefited by charging clients additional money for the illegal services.
Of course, as is always the case in criminal tax matters, none of the defendants ultimately “benefited” from the scheme – least of all Turay, who, like Mansaray before him, received a staggering 120-month prison sentence for his role in the conspiracy. The decade-long sentence was handed down in June 2018 by U.S. District Judge Harvey Bartle III, who ordered Mansaray to serve an identical prison term in November 2017. In addition to serving 120 months in prison, Turay was also ordered to pay restitution totaling $83,870.
Turay, whom a more recent DOJ press release described as “a partner at Medmans [sic] Financial Services,” caused a tax loss of approximately $8 million through his actions in preparing “over 1,000 fraudulent tax returns” for clients at Medman’s. In addition to lying on behalf of other taxpayers, Turay “also falsified his own personal income tax returns by falsely adding dependents to the returns” (italics our emphasis). Claiming dependents may entitle the taxpayer to valuable tax breaks such as the Child Tax Credit or Child and Dependent Care Credit, thus minimizing tax liabilities by thousands of dollars – with the critical caveat that the dependents must be real. (As our Orange County tax evasion lawyers noted in a previous article, falsely claiming dependents is tax fraud.)
Tax scams of this nature are not uncommon. On the contrary, the Internal Revenue Service (IRS) cited each of the scam’s major components – namely “identity theft,” “return preparer fraud,” and “falsely padding deductions on returns,” even making reference to the Child Tax Credit – on its most recent “Dirty Dozen”: the IRS’ annual compilation of tax fraud schemes, which our IRS tax lawyers recently covered.
However, this particular case took an unusual turn when Turay, who was born in Sierra Leone, fled the United States “after the government filed a motion to revoke his bail.” According to the press release, Turay managed to evade the authorities for approximately nine months “until [being] ultimately apprehended” by law enforcement.
U.S. Attorney William M. McSwain used Turay’s case as an opportunity to warn taxpayers against undertaking similar schemes. “This sentence should send a message to anyone,” said McSwain, “who thinks he can flout the law and target vulnerable victims without consequence.”
Whether you are a tax preparer who has been indicted on fraud charges, or a taxpayer who needs guidance after being victimized by an abusive tax scheme, the aggressive and knowledgeable tax attorneys at the Tax Law Office of David W. Klasing can provide the support you need. We have more than 20 years of experience handling civil and criminal tax matters and have earned a reputation for taking on challenging cases. When taxpayers and tax professionals need effective legal representation, they look to the Tax Law Office of David W. Klasing for zealous, on-point advocacy. For a reduced-rate consultation concerning a California, federal, or international tax question, contact our firm online, or call the Tax Law Office of David W. Klasing at (800) 681-1295 today.
Also, we’ve expanded our offices! In addition to our offices in Irvine and Los Angeles, the Tax Law Offices of David W. Klasing now have offices San Bernardino, Santa Barbara, Panorama City, Oxnard, San Diego, Bakersfield, San Jose, San Francisco, Oakland and Sacramento.