IRS Criminal Investigations in New Jersey

 – July 14, 2021
IRS Criminal Investigations in New Jersey

IRS-Criminal Investigation serves the American public by investigating potential criminal violations of the Internal Revenue Code and related financial crimes in a manner that fosters confidence in the tax system and compliance with the law.

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Below are cases that the IRS Criminal Investigations unit in New Jersey recently completed:


July 14, 2021

Newark Tax Preparer Sentenced to 18 Months in Prison for Aiding and Assisting in Preparation of False Tax Returns

A Pennsylvania man who worked as a tax preparer in Newark was sentenced today to 18 months in prison for helping his clients file falsified tax returns that generated larger refunds, Acting U.S. Attorney Rachael A. Honig announced.

Sylvain Dienhoue, 53, of Tobyhanna, Pennsylvania, previously pleaded guilty by videoconference before U.S. District Judge Susan D. Wigenton to an indictment charging him with three counts of aiding and assisting in the preparation of false and fraudulent tax returns. Judge Wigenton imposed the sentence today in Newark federal court.

According to documents filed in this case and statements made in court:

Dienhoue worked as a tax preparer at Cadi’s Multi Services in Newark. He knowingly and willfully aided and assisted in the preparation of 44 fraudulent tax returns on behalf of clients for the tax years 2014 through 2016. Dienhoue used fabricated and inflated figures, including expenses and itemized deductions, in order to generate inflated refunds.

In addition to the prison term, Judge Wigenton sentenced Dienhoue to one year of supervised release and ordered him to pay restitution of $237,738. He is also precluded from preparing taxes on anyone else’s behalf.

Acting U.S. Attorney Honig credited special agents from IRS – Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez in Newark, with the investigation leading to today’s sentencing.


Feb. 4, 2021

Tax Preparer Sentenced to Five Years in Prison for Conspiracy to Defraud IRS and Preparing False Tax Returns

A Maryland man working as a tax preparer in New Jersey was sentenced today to 60 months in prison for his role in a conspiracy to defraud the IRS by preparing false income tax returns for clients in order to boost business at tax preparation companies that he and others ran, Acting U.S. Attorney Rachael A. Honig announced.

Joseph Kenny Batts, 52, of Elkridge, Maryland, was convicted following a one-week trial before U.S. District Judge Michael A. Shipp in Trenton federal court on one count of conspiracy to defraud the United States and five counts of aiding and assisting in the preparation of false federal income tax returns. Judge Shipp imposed the sentence today by videoconference.

According to documents in this case and the evidence at trial:

From at least 2009 to April 2015, Batts was co-owner, along with conspirator Damien Askew, of Tax Pro’s, a tax return preparation and payroll business in Essex County, New Jersey, where Batts and others prepared tax returns. In order to boost their business, Batts, Askew, and codefendants Tony Russell, Angelo K. Thompson and Rudolph Sanders conspired to falsify their clients’ income tax returns for the purpose of generating refunds in amounts that their clients were not entitled to receive. The fraudulent practices used to inflate tax refunds included fabricating and inflating credits for education and child care; deductions, such as charitable contributions and unreimbursed employee expenses; and Schedule C business losses.

As part of their scheme, Batts, Thompson, Askew, Russell and Sanders also used fraudulent IRS Forms 1098-T to support false education credits that they had claimed on their clients’ false federal income tax returns prepared at Tax Pro’s and Tax Solutions and Associates.

Batts also used the Paid Taxpayer Identification Number (PTIN) – the identification number that paid tax preparers are required to place on tax returns that they have prepared – of his conspirator tax preparers when preparing tax returns to conceal his identity as the actual tax return preparer, due to, among other things, his prior tax fraud conviction.

By inflating the tax refunds through fraudulent means, Batts and his conspirators caused a total tax loss to the United States in excess of $1.6 million.

Thompson, Askew, Sanders and Russell have previously pleaded guilty to their roles. Thompson was sentenced to 27 months in prison and three years of supervised release; Russell was sentenced to 48 months in prison and three years of supervised release. Askew and Sanders are awaiting sentencing.

In addition to the prison term, Judge Shipp sentenced Batts to three years of supervised release and ordered him to pay $1.2 million in restitution to the IRS.

U.S. Attorney Carpenito credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez, with the investigation leading to today’s sentencing.


Oct. 15, 2020

Tax Preparer Sentenced to 27 Months in Prison for Conspiring to File False Income Tax Returns

A former employee of Tax Pro’s and Tax Solutions & Associates, tax preparation businesses located in Essex and Union counties, was sentenced today to 27 months in prison for conspiring to defraud the United States by filing false income tax returns, U.S. Attorney Craig Carpenito announced.

Angelo Thompson, 39, of Reistertown, Maryland, previously pleaded guilty before U.S. District Judge Michael A. Shipp in Trenton federal court to Count 1 of an indictment charging him with conspiracy to defraud the IRS.

According to documents filed in this case and statements made in court:

From at least 2009 to April 2015, Joseph Kenny Batts was co-owner, along with Damien Askew, of Tax Pro’s, a tax return preparation and payroll business in Essex County, where Thompson, Tony V. Russell, Rudolph Sanders, Batts, and Askew prepared tax returns. In order to boost their business, Thompson and these others conspired to falsify their clients’ federal income tax returns for the purpose of generating refunds from the IRS in amounts that their clients were not entitled to receive. The fraudulent practices that Thompson, Russell, Sanders, Batts, and Askew used to inflate tax refunds included fabricating and inflating credits for education and child care; deductions, such as charitable contributions and unreimbursed employee expenses; and Schedule C business losses.

Thompson and other members of the conspiracy also permitted Batts to use their Paid Taxpayer Identification Numbers (PTIN) – the identification number that paid tax preparers are required to place on tax returns that they have prepared – when preparing tax returns to conceal Batts’ identity as the actual tax return preparer, due to, among other things, Batts’ prior federal tax fraud conviction.

After law enforcement executed a search warrant at Tax Pro’s in or about April 2015, Batts discontinued Tax Pro’s and opened Tax Solutions and Associates in Union, where Thompson, Russell, and Batts continued preparing false federal income tax returns.

By fraudulently inflating the amounts of the tax refunds, Thompson and his co-conspirators caused a total tax loss to the IRS in excess of $1.6 million.

Askew, Sanders, and Russell, have pleaded guilty to their roles in the scheme. Batts was convicted at trial in Sepember 2019 of one count of conspiracy to defraud the United States and five counts of aiding and assisting in the preparation of false federal income tax returns. Russell has been sentenced to four years in prison; Askew, Sanders and Batts are awaiting sentencing.

In addition to the prison term, Judge Shipp sentenced Thompson to three years of supervised release and ordered him to pay restitution of $103,320.

U.S. Attorney Carpenito credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez, with the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorneys Cari Fais and Jihee Suh of the Special Prosecutions Division.


Sept. 16, 2020

Morris County Couple Admit Roles in Filing False Tax Returns

A Morris County, New Jersey, couple who owned and operated construction businesses in Morris County admitted their roles in filing false tax returns that failed to report all their personal income, U.S. Attorney Craig Carpenito announced.

Roger Magill, 50, of Wharton, the owner and operator of Reliable Construction, a/k/a Reliable Paving and Hackensack Pavers, a/k/a Hackensack Paving – collectively, the Magill entities – pleaded guilty before U.S. District Judge Susan D. Wigenton in Newark federal court to an information charging him with three counts of tax evasion. His wife, Ruby Magill, 50, of Wharton, pleaded guilty before Judge Wigenton to an information charging her with one count of misprision of felony.

According to documents filed in this case and statements made in court:

Roger Magill admitted that, between 2014 and 2016, he owned the Magill entities that operated in Morris County, New Jersey. Roger Magill admitted to obtaining hundreds of thousands of dollars in personal income from the Magill entities and attempted to hide his personal income from the IRS by using a fictitious identity to cash business checks at several check cashing businesses. Roger Magill admitted that he evaded paying $261,758 in personal income taxes. Ruby Magill admitted that she purposefully facilitated Roger Magill’s tax evasion scheme by allowing him to deposit his hidden income into business bank accounts that she operated and controlled.

The charges to which Roger Magill pleaded guilty carry a maximum potential penalty of five years in prison and a $250,000 fine. The charge to which Ruby Magill pleaded guilty carries a maximum potential penalty of three years in prison and a $250,000 fine. Sentencings are scheduled for Jan. 20, 2021.

U.S. Attorney Carpenito credited agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez, with the investigation leading to today’s guilty pleas.

The government is represented by Assistant U.S. Attorney Jamel Semper, Chief of the Organized Crime and Gangs Unit in Newark.


Sept. 16, 2020

Bergen County Attorney Indicted for Fraudulently Obtaining Leans Meant to Help Small Businesses During COVID-19 Pandemic

A Bergen County, New Jersey, attorney who allegedly fraudulently obtained nearly $9 million in federal Paycheck Protection Program (PPP) loans has been indicted, U.S. Attorney Craig Carpenito and Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division announced

Jae H. Choi, 48, of Cliffside Park, New Jersey, previously charged by complaint, was charged by indictment on Sept. 15, 2020, with four counts of bank fraud, four counts of false statements on a loan application, one count of aggravated identity theft, and one count of money laundering. The indictment seeks to forfeit 11 bank accounts and one investment account for the proceeds of the fraud, as well as a million-dollar home Choi purchased in Cresskill, New Jersey. An arraignment date has not yet been set.

According to documents filed in this case and statements made in court:

Choi submitted four fraudulent PPP loan applications to four lenders on behalf of four businesses that purportedly provided educational services. Choi fabricated the existence of hundreds of employees, manipulated bank and tax records, and falsified a driver’s license on the applications.
Choi falsely represented to the lenders that the companies controlled by him had hundreds of employees and paid over $3 million in monthly wages. In one instance, Choi emailed a lender falsely claiming that he just told 150 of his employees that they were losing their jobs because the PPP loan had not yet come through, and that he had “watched grown men and women crying.” Choi wrote in that same email that he “sincerely hope[d]” that the lender’s employee “would never find [himself] in this kind of situation.”

Based on Choi’s alleged misrepresentations, three of the four lenders funded three businesses with an approximately $3 million PPP loan each. Choi received a total of nearly $9 million in federal COVID-19 emergency relief funds meant for distressed small businesses.

Choi used the fraudulently obtained PPP loan proceeds to pay for numerous personal expenses, including to buy a nearly $1 million home in Cresskill, New Jersey, fund approximately $30,000 in remodeling and other improvements, and invest millions more in the stock market through an account held in the name of his spouse.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a federal law enacted March 29. It is designed to provide emergency financial assistance to millions of Americans who are suffering the economic effects resulting from the COVID-19 pandemic. One source of relief provided by the CARES Act is the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses through the PPP. In April 2020, Congress authorized over $300 billion in additional PPP funding.

The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of 1 percent. Businesses must use PPP loan proceeds for payroll costs, interest on mortgages, rent and utilities. The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within a set time period and use at least a certain percentage of the loan towards payroll expenses.

This case was investigated by IRS – Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez; inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge James Buthorn; the Small Business Administration Office of the Inspector General; and the Social Security Administration – Office of the Inspector General.

The government is represented by Assistant U.S. Attorney Andrew Macurdy of the District of New Jersey and Trial Attorney Andrew Tyler of the Fraud Section of the Department of Justice, Criminal Division.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at justice.gov/history.

The charges and allegations in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty in a court of law.