IRS Criminal Investigations in New Jersey
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September 29, 2021
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.
Follow IRS Criminal Investigation on Twitter at @IRS_CI to get national and local information about criminal tax and financial investigations, as well as consumer alerts about emerging threats from scammers and cybercriminals targeting individuals, businesses and tax professionals.
Below are cases that the IRS Criminal Investigations unit in New Jersey recently completed:
September 29, 2021
Vice President of New Jersey Window Tinting Company Sentenced to Prison on Employment Tax Charges
The vice president of a window tinting company in New Jersey was sentenced today to 24 months in prison on employment tax charges.
Stephen Walloga, a resident of New Jersey, was sentenced in Newark federal court before U. S. District Judge Stanley R. Chesler. Walloga was also ordered to serve three years on supervised release and pay restitution in the amount of $1,150,487.
According to court documents and statements made in court:
Walloga was the vice president of a window tinting company called A Pain In The Glass Inc. Walloga was responsible for collecting, accounting for and paying over payroll taxes for employees of A Pain In The Glass Inc. Walloga was also responsible for filing with the IRS Form 941, Employer’s Quarterly Federal Tax Returns, reflecting the employment taxes that the business had withheld and paid to the Internal Revenue Service each quarter.
For the tax quarter ending Dec. 31, 2017, Walloga admitted that he withheld but failed to pay over to the IRS approximately $37,524 in payroll taxes on behalf of employees working for A Pain In The Glass Inc. For the tax years 2010 through 2019, Walloga failed to pay over an additional $1,150,487 in employment taxes.
The investigation was conducted by IRS-Criminal Investigation, Newark Field Office, under the direction of Special Agent in Charge Michael Montanez and the U.S. Attorney’s Office, under the direction of Acting U.S. Attorney Rachael A. Honig.
The Government is represented by Assistant U.S. Attorney Joseph N. Minish.
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.