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March 27, 2019

New Jersey Tax Preparer Sentenced in Scheme Involving Filing of False Tax Returns and Bank Fraud

On December 21, 2018, in the District of New Jersey, tax preparer Brian A. Day was sentenced in connection with a scheme to defraud the Internal Revenue Service (IRS) and misappropriate his clients’ monies by the filing of false tax returns and bank fraud. Day previously pled guilty to the offenses in August 2018.

According to the court documents, Day, a resident of Port Murray, New Jersey, was self-employed as a tax return preparer. He 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. 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. The purpose of the scheme was for Day 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 names of the payees on the checks from the “IRS” to names 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. However, the IRS 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 was sentenced to 32 months’ imprisonment, followed by five years’ supervised release. He was further ordered to forfeit $61,000, pay $499,997.72 in restitution, and pay a special assessment fee of $800.

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; and D.N.J. Judgment filed Dec. 21, 2018.