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September 18, 2018

New Jersey Tax Preparer Pleads Guilty in Scheme to Defraud the IRS and Clients

On August 1, 2018, in the District of New Jersey, tax preparer Brian A. Day pled guilty to the filing of false tax returns and bank fraud in connection with a scheme to defraud the Internal Revenue Service (IRS) and to misappropriate his clients' monies. Day was initially indicted for the offenses in February 2017.

According to the court documents, Day, a resident of Port Murray, New Jersey, was self-employed as a tax return preparer. Day was the sole owner and operator of various tax preparation businesses located in Essex County, New Jersey, including PTS; Tax Consultants; and Tax Consultants, LLC. On behalf of those businesses, Day met with taxpayers and collected information relating to the preparation of their individual income tax returns.

Day knowingly and intentionally executed a scheme to defraud and obtain money by means of false and fraudulent representations. Day's purpose for the scheme was to misappropriate money from his taxpayer clients by falsely advising them that they owed tax payments to the IRS and directing them to give him checks made payable to the IRS in order to resolve their purported IRS liabilities. In fact, Day did not actually give the checks from his taxpayer clients to the IRS. Instead, he altered the payee on each check to a name matching or resembling that of one of his tax preparation businesses and deposited the checks into his own business bank account. Day made false or fraudulent representations to at least five individuals, resulting in a total loss of approximately $124,289.

According to the indictment, when Day's clients contacted him regarding their checks, he presented fraudulent documents purportedly issued by the IRS to two of the taxpayers in an attempt to conceal and further his fraud. The IRS had never issued these documents. Additionally, Day prepared or presented at least 21 fraudulent and false tax returns to the IRS for Tax Years 2009 through 2015, resulting in a loss to the IRS of approximately $491,007.

Day could face a maximum statutory sentence of 30 years' imprisonment and was ordered to forfeit $61,000. His sentencing is set for November 14, 2018.

    Source:  The facts in this case narrative come from the following publicly available documents: D.N.J. Indict. filed Feb. 1, 2017; D.N.J. Plea Agr. filed Aug. 1, 2018; D.N.J. Consent Judgment and Order of Forfeiture filed Aug. 1, 2018; D.N.J. Crim. Docket as of Aug. 15, 2018.