DEBRA W. YANG
United States Attorney
Central District of California
Thom Mrozek, Public Affairs Officer
(213) 894-6947
thom.mrozek@usdoj.gov
April 9, 2004 Return to the
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SAN FERNANDO VALLEY ACCOUNTANT INDICTED IN SCHEMES THAT DEFRAUDED CLIENTS VIA FAKE I.R.S. AUDITS AND EMBEZZLEMENT OF CORPORATE INCOME TAX REFUNDS
A North Hollywood accountant has been indicted on federal charges related to two schemes in which he defrauded clients out of well over $100,000, in part by falsely telling victims that they were being audited by the Internal Revenue Service.
David Scott Halcrow, 54, who until recently lived in Granada Hills, was indicted Thursday afternoon by a federal grand jury in Los Angeles. The indictment alleges 17 counts of mail fraud and six counts of possessing forged checks. Halcrow, who also used the name David Tate Scott, is a certified public accountant who owned Halcrow & Company in Studio City and who performed tax accounting services for his clients.
In the scheme involving the non-existent IRS audits, Halcrow caused sham audit notices to be sent to some of his clients. After he sent the fake notices that informed clients they had been selected for IRS audits, Halcrow persuaded his clients to retain him for the purported audits. Halcrow solicited retainer fees and billed additional fees to represent the clients before the IRS. As a result of this scheme, Halcrow defrauded his clients out of approximately $14,342.
In the second scheme, Halcrow received payments from his clients that they expected to be submitted to the IRS to pay estimated taxes. Rather than submit these payments to the IRS for the benefit of his clients, Halcrow caused the payments to be deposited with the IRS at accounts for corporations that Halcrow had set up. Halcrow also established an account on behalf of his uncle, who had no knowledge of and did not give consent to Halcrow’s activities. Halcrow then filed with the IRS fraudulent income tax returns in the names of the corporations and the uncle, requesting federal income tax refunds from the IRS. As a result of this scheme, Halcrow caused the IRS to issue refund checks totaling at least $76,671.
Halcrow is also charged with possessing checks that had been written by a client but had been altered to make them more valuable.
Halcrow has agreed to surrender to federal authorities next week. He will be arraigned on the indictment later this month in United States District Court in Los Angeles. If he is convicted of all charges in the indictment, Halcrow faces a maximum statutory penalty of 165 years in federal prison.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty.
This case is the result of an investigation by the Treasury Inspector General for Tax Administration.
Release No. 04-048