Des Moines Tax Preparer Convicted of Tax Fraud

DES MOINES, IA – A Des Moines area tax preparer was convicted of preparing and presenting false tax returns, wire fraud, and aggravated identity theft following a three-day jury trial, announced United States Attorney Kevin E. VanderSchel. On July 26, 2017, a jury found Lony Tap Gatwas, 48, of Ames, Iowa, guilty of four counts of wire fraud, seven counts of aggravated identity theft, and seven counts of preparing and presenting false tax returns. Sentencing has been scheduled for December 1, 2017, at 9 a.m., before United States District Court Judge Rebecca Goodgame Ebinger.

Gatwas was charged with engaging in a scheme to defraud the Internal Revenue Service by preparing and filing personal income tax returns listing false dependents. During trial, the government presented evidence Gatwas placed his own children, as well as other children, on his clients’ personal income tax returns as dependents, when these children had no relationship to the taxpayers, did not live with the taxpayers, and the taxpayers provided no financial support for the children.

Gatwas falsely inflated his clients’ refunds by thousands of dollars by placing false dependents on his clients’ tax returns. Clients’ testimony established Gatwas charged them an average of $1,500 for each false dependent he put on their return. When his clients were audited, Gatwas instructed at least two of the clients to lie to IRS Revenue Agents about their relationship with the false dependents.

Preparing and presenting a false tax return is punishable by a maximum of three years imprisonment and a maximum $100,000 fine. The crime of wire fraud has a maximum prison term of 20 years and up to a $250,000 fine. Gatwas faces a minimum prison term of two years and up to a $250,000 fine for the crime of aggravated identity theft.

The Internal Revenue Service – Criminal Investigation conducted the investigation. This case is being prosecuted by the United States Attorney’s Office for the Southern District of Iowa.

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Learn more about this release by calling Rachel J. Scherle at 515-473-9300, or by emailing her at Rachel.Scherle@usdoj.gov.