James T. Jacks
Acting United States Attorney
Northern District of Texas

PRISON SENTENCES FOR NON-FILERS, DISHONEST TAX PREPARERS,
AND DISHONEST FILERS

DALLAS — The U.S. Attorney’s Office for the Northern District of Texas today announced highlights of its recent work in defending and enforcing the nation’s tax laws. The Northern District of Teas has prosecuted numerous non-filers, tax preparers, and tax filers who have violated federal law; most have been sentenced to serve time in federal prison, without the possibility of parole.

Failure to File

U.S. v. James Michael Long

Long is currently serving a 37-month federal prison sentence for failing to file income tax returns. He was also ordered to pay $93,484.69 in restitution to the IRS. Long was convicted at trial in U.S. District Court in Lubbock, Texas, on four counts of willful failure to file an income tax return.

During Long’s trial, the government presented evidence that during tax years 2001, 2002, 2003 and 2004, Long received income from several sources, including Dallas Auto Auction, ADESA Texas and affiliates, Assister and Associates, Caison Auction Service, Greater Nevada Auto Auction, John Sisk Auctioneering, Ward Brothers Tractor Co., and DFW Auto Auction. His income was $65,447.47 for 2001; $72,714 for 2002; $188,485 for 2003; and $135,177.60 for 2004 ---- well above the minimum amounts required to file an income tax return for each of the respective years

Dishonest Tax Filers

U.S. v. Gricelda Ramirez

During a narcotics investigation in 2006, federal agents seized approximately $1.4 million from a residence in Dallas, as well as financial records concerning Gricelda Ramirez and the Dallas restaurant she owned, Taqueria El Paisano. Later, during the execution of federal search warrants, federal agents seized $1,023,990 from three bank accounts in the name of Gricelda Ramirez or Taqueria El Paisasno.

Ramirez admitted that she failed to report approximately $560,000 in her business’s gross receipts on her 2005 personal income tax return. She is now serving a 14-month federal prison sentence and was ordered to pay $170,532 in restitution, representing the amount of federal income tax that she owed. In addition, desiring to settle all seizure and forfeiture matters concerning her case, Ramirez agreed to forfeit $900,000 of those funds and use the remainder to pay the income tax she owed for tax years 2004 through 2007.

U.S. v. Dong Choi Kim

Kim, a Dallas businessman who owned Giant Sign Corporation in Dallas, is serving a 12-month and one day federal prison sentence for making a false statement on an income tax return. From 2001 through 2003, Kim would use check cashing stores to cash customers’ checks in order to obtain cash for his own personal use, omitting these proceeds from the reported gross receipts of his business. As a result of this scheme, Kim was able to avoid the full payment of his taxes for those three tax years.

Kim admitted that he omitted $166,345.23 in income from his 2002 income tax return. As a result of his offense, Kim owes the IRS $22,142 for tax year 2001; $54,232.23 for tax year 2002; and $4807 for tax year 2003, for a grand total of $81,181.23.

U.S. v. Malcolm Kelso

Kelso is currently serving a 24-month federal prison sentence for failing to report nearly $400,000 in lawsuit settlement proceeds on his income tax return. He was also ordered to pay a $50,000 fine. Kelso pled guilty to one count of making and subscribing a false tax return under the penalty of perjury. He admitted that in May 2004, he received checks totaling $399,981.80 in proceeds from the settlement of a lawsuit, Broadcast.com Inc. v. Universal Image, Inc., et al., No. 04-01402 (162nd Dist. Ct. Dallas Co.). Those proceeds were income to Kelso.

Dishonest Tax Preparers

U.S. v. Herbert Jena, et al.

Jena, a tax preparer and the owner of Dallas/Fort Worth tax preparation services, Montfort Tax Services and Jackson Hubbert, admitted that he caused false and fraudulent tax returns to be filed that requested inflated fraudulent tax refunds. These returns contained false information regarding taxpayers’ eligibility for tax refunds and credits under the Telephone Excise Tax refund (TETR) and Fuel Tax Credit that the IRS offered in 2006. According to the indictment, of the approximately 1681 individual income tax returns that Jena filed between January 12, 2007 and February 29, 2007, 1400 contained fraudulent and false information. The government informed the Court at Jena’s sentencing hearing that the total amount of the TETR and Fuel Tax Credit fraudulent claims that Jena and others caused to be submitted by Montfort and Jackson Hubbert was approximately $2.78 million. As a result of those fraudulent refund
claims, the IRS paid approximately $1,158,168 in fraudulent TETR and Fuel Tax Credit claims.

Herbert Jena, and his two co-defendants, Aurora Perez and Nancy Munoz, who worked for him as tax preparers and who pled guilty to their roles in the scheme, are to be sentenced on May 6, 2009.

U.S. v. Rosie Hilburn

Hilburn, who worked as a tax return preparer operating under the name “D and R Associates,” is currently serving a 21-month federal prison sentence for making and presenting a false material tax return. In addition, she was ordered to pay a $5000 fine. She admitted that she falsified a client’s tax return by making up $27,875 in medical expense deductions, $8,328 in personal property tax deductions, $19,375 in charitable donations, $2282 in other expenses deductions, and a $6260 miscellaneous deduction on the client’s 2002 income tax return. These false deductions created a $14,777 material loss to the IRS.

Further information about these and other tax cases in the Northern District of Texas, are available on the District’s web site http://www.usdoj.gov/usao/txn/pressreleases.html

Information about cases prosecuted by the U.S. Department of Justice’s Tax Division are available at http://www.usdoj.gov/tax/ and on the IRS’s web site http://www.irs.gov/; and on the IRS Criminal Division’s web site http://www.ustreas.gov/irs/ci/.

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