As readers of our tax blog have seen highlighted time and time again, it is typical for sentencing judges to hand down serious penalties in criminal tax cases. That of 54-year-old Minneapolis man Kenneth Mwase, who was recently sentenced to more than 10 years in federal prison, is the perfect example. In a Department of Justice press release, prosecutors announced that Mwase, who previously managed a tax preparation business, “pleaded guilty to one count of conspiracy to defraud the United States, one count of aggravated identity theft, and one count of failure to appear at sentencing” after preparing and filing thousands of fraudulent returns on behalf of the company’s customers. In addition to a decade-long sentence, Mwase was also ordered to serve three additional years of supervised release after leaving prison.
Manager of Tax Prep Business Sentenced to 121 Months After Filing Fraudulent Returns
A DOJ press release issued January 28, 2019 announced that defendant Kenneth Mwase, who also used the alias “Chatonda Khofi,” pleaded guilty to aggravated identity theft (18 U.S. Code § 1028A), conspiring against the United States (18 U.S. Code § 371), and failing to appear in court. The identity theft and conspiracy charges arose from Mwase’s role, as manager and director of a Minneapolis-area tax return preparation service known as Primetime Tax Services Inc., in a scheme to file and prepare thousands of fraudulent federal and Minnesota state income tax returns for Primetime customers.
The case traces back to 2014, when prosecutors filed a superseding indictment alleging that Mwase and four co-conspirators used Primetime as a vehicle to commit various crimes, not only against the government, but their own clients – some of whom, according to the press release, were “escorted… to a check cashing location or ATM” by Primetime personnel, who then “demanded additional cash” for their services.
Assisted by 39-year-old Ishmael Kosh of Philadelphia, 47-year-old David Mwangi of Arlington, 36-year-old Amadou Sangaray of New York, and 43-year-old Francis Saygbay of Minneapolis, Mwase helped to prepare and file thousands of fraudulent tax returns, including approximately 2,000 federal returns in addition to roughly 1,700 Minnesota state returns, over the three-year period from 2006 to 2008. The aim of the scheme was to cause the IRS to issue inflated tax refunds, a goal the defendants pursued by reporting “false dependents, fake business income and losses, inflated deductions, inflated credits, and false filing statuses” on Primetime clients’ returns.
Tax schemes of this nature, though illegal, are not uncommon. For instance, our criminal tax attorneys previously wrote about a Philadelphia tax preparer who was sentenced to five years in prison after using stolen information to file returns on which he claimed false dependents. As this and other cases have shown to us over and over, tax preparers face substantial prison time for filing fraudulent returns, in addition to professional sanctions. Mwase, for example, received a sentence of 121 months – to be followed by 36 further months of supervised release. In addition, he will likely be ordered to pay fines and IRS restitution.
Depending on the circumstances, fines and restitution can cost some tax defendants millions of dollars. The fraudulent tax returns that were prepared and filed by Mwase and his co-defendants caused a government tax loss exceeding $2.5 million dollars, suggesting a substantial restitution order.
San Francisco IRS Tax Fraud Defense Attorneys Serving Northern and Southern California
In last year’s list of the top tax schemes, the IRS warned taxpayers of fraudulent tax preparation services that promise huge refunds – even before reviewing a single document. With tax season upon us yet again, taxpayers (and tax preparers) must proceed with caution. Tax preparer’s including CTEC certified, E.A.’s and Tax Attorneys & CPAs can be charged with conspiracy, tax evasion, assisting a false return, and other serious tax crimes for working with clients or colleagues to violate federal laws.
If you are being investigated by the IRS, especially where your preparer is under criminal investigation, or if you or your business has been chosen for a tax audit, it is urgent that you contact an experienced IRS tax defense attorney for assistance. Serving Northern and Southern California, the Continental United States and the planet as to international tax issues, our dedicated, award-winning San Francisco IRS fraud defense lawyers have extensive experience fighting misdemeanor and felony tax charges. For a reduced-rate consultation, contact the Tax Law Office of David W. Klasing online, or call (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.
Note: If you have concerns about the privacy of our initial or subsequent communication and are unable to easily travel to our Irvine / Orange County Main Office, consider scheduling a GoToMeeting to safely and securely establish an initial or maintain an existing attorney client relationship. With end-to-end encryption, strong passwords and top-rated reliability, no one is messing with your meeting. To schedule a reduced rate initial consultation via GoToMeeting follow this link. Call our office and request a GoToMeeting if you are an existing client. We are generally happy to travel to any of our appointment only satellite offices for a subsequent meeting in appropriate circumstances once a relationship is established via a signed engagement letter and the payment of an initial retainer or where enough retainer is available where a current client to cover the reasonable travel time and time required for the meeting.
Will it cost me more to hire the Tax Law Offices of David W. Klasing, who’s main office and the vast majority of the firm’s staff is located in Irvine California, but an appointment only Satellite office is close to my location, as opposed to a local company? Absolutely not! See our policies that address this issue here:
More Commonly Asked Tax Audit Questions
- How should Tax Audits be Handled by Criminal Tax Counsel?
- How to survive audit when I cheated on return being audited
- What is an eggshell audit?
- What is a reverse egg shell audit?
- Why is a reverse egg shell audit dangerous for a taxpayer?
- Warning signs of a criminal referral from an IRS audit
- Effective tax defense counsels goals in an egg shell audit?
- How are the 4 goals and outcomes 1 and 2 best obtained?
- What are the possible outcomes of an egg shell audit?
- Is it my right to know why I was selected for examination?
- What can I do to prepare for an audit?
- What is an IRS civil examination?
- How IRS decides which tax returns are audited
- What are my appeal options if I disagree with IRS?
- What are my basic taxpayer rights if the IRS audits me?
- Options if I am unable to pay at the conclusion of audit
- What a 30 or 90 day letter from the IRS means
- What is involved with appealing disagreements?
- Rights to disagree with IRS tax auditor’s findings
- Can I stop the IRS from repeatedly auditing me?
- Can I have the examination transferred to another area?
- Can I record my IRS interview and is it a good idea?
- How many years of returns are at risk during an audit?
- Common reasons for the IRS to conduct a tax audit
- How to avoid negative consequences from an IRS interview
- Have to agree to interview by taxing authority directly?
- Are all audits the same?
- What should I do if the IRS is investigating me?
- What if I don’t respond to a taxing authority audit notice
- Your rights during an IRS tax audit
- Risks of attending an IRS audit without a tax lawyer
- Most common audit technique used by taxing authorities
- Don’t go into an IRS audit without representation
- Why hire an attorney to represent me in an audit?
- Why hire David W. Klasing to represent me in an audit
Questions and Answers for Criminal Tax Representation
- When tax defense counsel parallels tax crime investigation
- Guilty of tax obstruction by backdating documents?
- To be found guilty of tax obstruction must a person actually be successful in impeding the IRS’s functions?
- Help! The Document I Gave the IRS Had False Information
- Tax crime aiding or assisting false return IRC §7206(2)
- What is the crime known as tax obstruction § 7212?
- What is the difference between tax perjury and tax evasion?
- What is the tax crime commonly known as tax perjury?
- What is a Klein Conspiracy?
- Increased possibility of civil action in IRS investigation
- Am I Guilty of Tax Evasion if the Law is Vague?
- What happens if the IRS thinks I committed tax crimes?
- What are ways to defend against a tax evasion charge?
- Difference between criminal tax evasion and civil tax fraud
- What accounting method does the IRS use for tax fraud
- Can I Change Accounting Method to the Accrual Method
- What is the willfulness requirement for tax evasion?
- I didn’t know I committed tax fraud. Can I get off?
- Concealed assets from IRS. Can I avoid tax evasion charges
- How government proves I willfully engaged in tax evasion
- What is the venue or court where a tax crime case is heard?
- Must the IRS prove tax crimes beyond a reasonable doubt?
- Is it a crime to make false statements to the IRS?
- Will the IRS overlook my tax evasion if it’s minor?
- Failed to tell IRS about my nominee account
- Audit risk with cash based business transactions
- How to defend a client charged with tax evasion
- Is it tax evasion if I didn’t file income tax return?
- Government says I attempted to evade my taxes. Now what?
- I forgot to pay my taxes or estimated tax. Is this a crime?
- Government proof I “willfully” failed to pay taxes
- How to respond to willful tax evasion charges
- Being audited after using a tax professional
- Rules for what an IRS agent can do while investigating me
- How tax preparers, attorneys and accountants are punished
- How the IRS selects tax crime lead for investigation
- How does the IRS prosecute suspected tax crimes?
- Does IRS reward informant leads for suspected tax crimes?
- How the government proves deficiency in a tax evasion case
- Do prior tax crimes factor into new IRS tax convictions?
- Requesting conference before investigative report is done
- Requesting conference after IRS Special Agent Report
- What are my rights during an IRS criminal investigation?
- Avoid prosecution for tax crime with voluntary disclosure?
- Defense tactics that make it hard for to prove willfulness
- How a tax attorney can stop your criminal tax case?
- What can you generally tell me about tax crimes?
- Continuing filing requirement with investigation pending
- Federal criminal code crimes that apply to tax issues
- Penalty for making, subscribing, and filing a false return
- CID special agent’s report for criminal prosecution
- What is the discovery process in a criminal tax case?
- What the IRS includes in indictment for tax case
- What is the hardest element of a tax crime to prove?
- IRS methods of gathering evidence to prove tax crime
- What does a grand jury do in IRS tax crime prosecution?
- Failure to keep records or supply information
- Failure to make a return, supply information, or pay tax
- What is attempting to evade payment of taxes?
- What is income tax evasion and how is it punished?
- What is attempted income tax evasion?
- What is the crime of failure to pay tax? What is punishment
- Crime of making or subscribing false return or document
- Criminal Investigation Division investigation tactics
- Tax crimes related to employment tax forms and trust funds
- Tactics to defend or mitigate IRS criminal tax charges
- How the IRS generates leads about suspected tax crimes
- What is the crime ”evasion of assessment” of tax?
- Specific examples of “attempting” to evade tax assessment
- What is the so-called Spies evasion doctrine?
- Does overstating deductions constitute tax evasion?
- Is it tax evasion if my W-4 contains false statements?
- IRC §7201 attempt to evade vs. common-law crime of attempt
- What are the penalties for Spies tax evasion?
- How government proves a taxpayer attempted tax fraud
- What is a tax that was “due and owing.”
- What is evasion of assessment for tax liability?
- Is evasion of assessment different from evasion of payment
- Does the IRS have a dollar threshold for tax fraud?
- What is the IRS burden of proof for tax fraud convictions?
- Are Tax Laws Constitutional?
- What is the source of law that defines tax evasion?
- Does section 7201 create two distinct criminal offenses?
- Does tax evasion definition include partnership LLC
- What if I helped someone else evade taxes?
- Is it illegal to overstate deductions on my tax return?
- Is it illegal to conceal bank accounts from the IRS?
- Do later losses justify prior deductions?
- Common reasons the IRS and DOJ start investigations
- What is the Mens Rea component of tax crimes?
- What is a proffer agreement and what are the risks?
- Why to have an attorney to review a proffer agreement
- Why enter into a proffer agreement?
- Limited use immunity from proffer agreements
