William S. Duffey, Jr., United States Attorney for the Northern District of Georgia, and C. Andre' Martin, Special Agent in Charge, Internal Revenue Service Criminal Investigation Division, Southeast Area, announce the latest Indictments and Criminal Informations filed against fraudulent tax return preparers and other criminal tax offenders in the Northern District of Georgia. In the last month, federal grand juries in the Northern District of Georgia have indicted several criminal tax cases against individuals:

On April 1, 2003, a federal grand jury indicted GEORGE ANDREW PIASECKI, 57, of Alpharetta, Georgia, in a seven count indictment charging him with willfully procuring and causing the preparation and presentation to the Internal Revenue Service of false and fraudulent tax returns in violation of 26 U.S.C. Section 7206(2). PIASECKI used information given to him by the taxpayers to prepare false Forms W-2 and 1099-R, and to file false tax returns in these individuals' names. The false Forms W-2 and 1099-R reported wages which were never earned and withholdings that were never made. Using these fraudulent documents, PIASECKI generated false refunds. PIASECKI also prepared and filed false returns for himself, using the name "Andrew" and his nickname, "Drew," and for his wife. The case was investigated by IRS Special Agent Lisa Mustachia and is being prosecuted by AUSA R. Joseph Burby.

KIMBERLY THOMPSON, 35, of Jonesboro, Georgia, was indicted on March 26, 2003, on eight counts of making and subscribing fraudulent tax returns in violation of 26 U.S.C. § 7206(1). THOMPSON allegedly prepared tax returns in which she inserted fictitious information in order to be able to collect fraudulent refunds. The indictment alleges that THOMPSON submitted tax returns with forged W-2 forms and forged taxpayer signatures. The case was investigated by IRS Special Agent Lucinda Holloway and is being prosecuted by AUSA Brian Pearce. In addition, the United States Attorney has filed Criminal Informations against several other tax return preparers, who have pleaded guilty and are awaiting sentencing: including:

On March 20, 2003, three sisters from Carrollton, Georgia pleaded guilty to separate Criminal Informations, charging them with preparing fraudulent tax returns in violation of Title 26, U.S.C., Section 7206(2): BELINDA WALKER, 46, ANGIE ABDUSSALAAM, 42, and KEILA OWENSBY, 35. During the guilty pleas the United States advised the court that between 1996 and 1998, (while ABDUSSALAAM was working for the IRS) the three sisters defrauded the government of approximately $95,000. They perpetrated the fraud by preparing false individual income tax returns in the names of other taxpayers which claimed refunds to which the taxpayers were not entitled. Often through intermediaries, the sisters enticed others to provide their social security numbers and the numbers of their children with the promise of money from an unspecified government program. Using this information, the sisters would then prepare and file an individual income tax return in the name of the taxpayer who provided the information, but with an address to which the sisters had access, such as their own address or the address of a relative. The returns reported falsely inflated wages and/or falsely claimed dependents. On that basis, the returns claimed the Earned Income Credit (EIC) and a tax refund, usually around $3,500 per return. When the refund check arrived, the sisters or an intermediary would take the taxpayer to negotiate the check and split the proceeds. The tax payer received only a modest portion of the refund -- between $150 and $1,000 -- while the balance went to one of the sisters. The sentencings are scheduled for June 13, 2003, before United States District Judge G. Ernest Tidwell. The case was investigated by IRS Special Agent Lisa Mustachia, and is being prosecuted by AUSA R. Joseph Burby.

On February 26, 2003, JUDY A. LOVETT, 49, of Clarkston, Georgia, and her daughter, REANDRA LOVETT, 32, of Decatur, Georgia, waived indictment and pleaded guilty to separate Criminal Informations charging them with preparing fraudulent income tax returns. JUDY LOVETT learned to prepare IRS returns from the booklets that the IRS sent in the mail. JUDY LOVETT used blank W-2 forms to file tax returns using false earnings information. Between early 1997 through the middle of 1999, JUDY LOVETT filed multiple false returns. Each of these returns contained false earnings information which generated a claim for a refund due from the IRS. The refund claimed on the false return purported to represent the return of withheld tax, and/or payment of an earned income tax credit. One such false return was the return charged in the indictment which JUDY LOVETT filed in the name of "R. Brown," seeking a refund of $3,189.00. During the guilty plea, the United States advised the court that the total amount of refunds claimed on all false returns filed by JUDY LOVETT was $83, 657.00. During the plea colloquy the United States said that JUDY LOVETT taught her daughter, REANDRA LOVETT how to file the false returns. REANDRA LOVETT then filed false returns in her own name as well as the name of her ex-husband. The total amount of refunds claimed on all false returns filed by REANDRA LOVETT was $19,967.00. The LOVETTS will be sentenced by United States District Judge Marvin H. Shoob, this May, 2003. The case was investigated by IRS Special Agent Alan Henry and prosecuted by AUSA Barbara E. Nelan.

On January 24, 2003, FREDDIE KNOWLES, 57, of Ellenwood, Georgia, waived indictment and pleaded guilty to a Criminal Information charging him with ten counts of preparing fraudulent tax returns containing fictitious dependents, deductions and other information for the years 1995 through 1998, in violation of Title 26, U.S.C. § 7206(2). His fraudulent preparation of tax returns allowed his clients to obtain refunds to which they were not entitled, or larger refunds than they were entitled to. KNOWLES will be sentenced on April 9, 2003 by United States District Judge Orinda D. Evans. The case was investigated by IRS Special Agent Stan Lee and was prosecuted by AUSA Brian Pearce.

In January, 2003, United States District Court Judge Charles A. Pannell, Jr. sentenced ROSALIND JOHNSON, 37, of Norcross, Georgia, to 48 months imprisonment for willfully aiding and assisting taxpayers in the preparation of false and fraudulent tax returns. ROSALIND JOHNSON was a tax preparer who was charged by a grand jury with 20 counts of willfully aiding and assisting taxpayers in the preparation of false and fraudulent tax returns. Each of those returns contained a false and fraudulent total tax amount which was calculated based on falsely inflated itemized deductions, in violation of Title 26, United States Code, Section 7206(2). On August 7, 2002, a jury convicted Ms. JOHNSON on all counts. The Court sentenced her to 48 months imprisonment based on the charged conduct and relevant conduct involving approximately 1300 fraudulent tax returns Johnson prepared. The tax returns reflect Ms. JOHNSON's consistent pattern of inflating certain itemized deductions, including medical, charitable and business expenses, to reduce taxable income. Evidence at trial showed that she tried to cover up the inflated items by providing some of her clients with false supporting documents for civil tax audits. The total tax loss for the false returns was approximately $2.6 million. The case was investigated by IRS Special Agent Dorothy McGuire and was prosecuted by AUSAs Phyllis Sumner and R. Joseph Burby.
Duffey and Martin report that tax return preparers are not the only persons being investigated by the IRS and charged by the United States Attorney. Several individuals have been charged for allegedly violating criminal tax laws when they filed fraudulent tax returns for themselves, or failed to file their tax returns when they were required to do so by law. These cases include the following, beginning with the most recent:

On April 1, 2003, ROBERT L. KNIGHT, 41, of Marietta, Georgia, was indicted on three counts of failure to file income tax returns for the tax years 1996-98, during which time he made approximately $140,000 in net income and avoided more than $40,000 in federal income taxes. The case was investigated by IRS Special Agent Art McGovern and is being prosecuted by AUSA Paul Monnin.
On December 18, 2002, RONALD G. RALSTON, 50, of Fairmount, Georgia, a certified public accountant who practiced in the Dalton area, was charged was charged with 3 counts of tax evasion for his own personal taxes and with 7 counts of filing false tax returns relating to withholding of employee income taxes and social security taxes. The case is before United States District Judge Willis B. Hunt, Jr. and was investigated by IRS Special Agent Percy Colquitt and is being prosecuted by AUSA Richard M. Langway.

On October 3, 2002, JOHN P. MILLER, 54, of Marietta, Georgia, was charged by information with three counts of tax evasion for willfully attempting to evade taxes by under reporting large amounts of income on his individual income tax returns for 1995, 1996 and 1997. MILLER failed to disclose his ownership of BSM Marketing and his control of two corporate bank accounts, which he used to pay personal expenses, but did not include those funds in his personal or corporate income tax returns. On October 18, 2002, MILLER pleaded guilty to the charges. The individual and corporate tax losses total approximately $109,000. MILLER is scheduled for sentencing on April 28, 2003, before United States District Judge Thomas W. Thrash, Jr. The case was investigated by IRS Special Agent Ken Roberts, and is being prosecuted by AUSA Phyllis Sumner.

ANNIE BAILEY, 59, of Riverdale, Georgia, was indicted on September 11, 2002, on two counts of willfully attempting to evade taxes by failing to file tax returns for 1996 and 1997. Despite filing no individual tax returns, BAILEY earned wages as a scale house operator of Weyerhaeuser, a saw mill located in Barnesville, Georgia, and received substantial proceeds for her role in a fraudulent timber scheme in each of those years. On December 17, 2002, BAILEY pleaded guilty to the charged tax offenses and admitted her role in the fraud scheme in which she and a timber supplier, over about a nine year period, defrauded the Barnesville saw mill by creating false and fraudulent timber scale tickets for non-existent loads of timber or "phantom timber loads." The losses associated with the tax offenses and the fraud scheme are in excess of $5 million. BAILEY is scheduled for sentencing on May 7, 2003, before United States District Judge Orinda D. Evans. The case was investigated by IRS Special Agent Kellie Lewis, and is being prosecuted by AUSA Phyllis Sumner.

United States Attorney Bill Duffey said, We will hold those who cheat the system accountable. The integrity and fairness of our tax system requires us to prosecute people, motivated by greed, who abuse the tax system."
Duffey and Martin report that they see many different fraudulent claims on tax returns. Some of the most common are fictitious dependents and fictitious deductions. A more complicated, but popular, fraudulent scheme occurs when a person claims earned income credit when they are not entitled to it, because they have no income and they have no dependents. Said Duffey: "There is no limit to the creativity of those who commit tax fraud. If the return promised by a preparer seems too good to be true, find someone else to help you."

Andre Martin, Special Agent In Charge of IRS-Criminal Investigations, noted, "Taxpayers should beware of tax scams, schemes and con artists. The IRS views these schemes as organized tax evasion and it is a top priority for us to stop promoters of such schemes. Nothing undermines confidence in the tax system more than the impression that the average honest taxpayer has to pay taxes while dishonest taxpayers are allowed to get away with not paying. Anyone who suspects tax fraud or knows of an abusive return preparer should call the IRS Tax Fraud Hotline at 1-800-829-0433."

Duffey and Martin warned taxpayers to be extremely careful of preparers, because taxpayers are ultimately responsible for their tax return. Whether a tax preparer simply makes an error or intentionally commits fraud, it is the taxpayer who actually owes the tax
and any penalties and interest on the taxes owed.

Taxpayers should be careful of preparers:
Claiming that they can obtain larger refunds than other preparers,
Basing their fee on a percentage of the amount of the refund, and
Refusing to sign the tax return or provide the taxpayer with a copy for their records.

Taxpayers should:
Get referrals from satisfied clients.
Ask the preparer about their training, experience and current knowledge of tax law.
Find out whether the preparer can represent taxpayers in an audit. Only Enrolled Agents, Certified Public Accountants and lawyers are authorized to represent taxpayers before the IRS.
Consider whether the individual or firm will be around to answer questions about the preparation of the tax return months or even years after the return has been filed.
Always review your return before signing, ask questions on entries you don't understand, and get a copy of the return for your records.
Never sign a blank tax form or one filled out in pencil.

For further information please contact William S. Duffey, Jr., United States Attorney or F. Gentry Shelnutt, Chief, Criminal Division, through Patrick Crosby, Public Affairs Officer, U.S. Attorney's Office, at (404) 581-6016. The Internet address for the HomePage for the U.S. Attorney's Office for the Northern District of Georgia is www.usdoj.gov/usao/gan.