JUSTICE DEPARTMENT SUES NEVADA MAN TO HALT ALLEGED TAX FRAUD SCHEME

Court Order Sought Barring Las Vegas Man from Preparing Tax Returns for Others

WASHINGTON, D.C. - The Justice Department announced today that it has asked a federal court to bar James A. DiLullo of Las Vegas, Nev., from preparing tax returns for others and from selling alleged tax fraud schemes. The civil injunction suit, filed in Las Vegas with the U.S. District Court for the District of Nevada, alleges that DiLullo has prepared fraudulent income tax returns for customers based on a scheme that uses sham trusts.

According to the government complaint, DiLullo’s scheme has used sham trusts to conceal customers’ income and assets, and to underreport income on tax returns. DiLullo allegedly has charged customers between $1,000 and $2,000 plus an annual fee to participate in the scheme. Additionally, the suit alleges that DiLullo has obstructed Internal Revenue Service (IRS) investigations. The complaint states that the IRS estimates that DiLullo’s schemes have cost the federal Treasury over $2.25 million since 2002.

Trust misuse is included in the IRS’s 2007 list of the Dirty Dozen tax scams. http://www.irs.gov/newsroom/article/0,,id=167983,00.html. The government complaint asks the court to order DiLullo to give the Justice Department a list of his customers’ names, addresses, e-mail addresses, and Social Security numbers.

Since 2001 the Justice Department has obtained injunctions against more than 225 tax return preparers and tax fraud promoters. Information about these cases is available at http://www.usdoj.gov/tax/taxpress2007.htm. Information about the Justice Department’s Tax Division can be found at http://www.usdoj.gov/tax/index.html.