Tax Preparer Convicted of Conspiracy to Defraud IRS and Preparing False Tax Returns
TRENTON, N.J. – A Maryland man working as a tax preparer in New Jersey was convicted today on charges of 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, U.S. Attorney Craig Carpenito announced.
Joseph Kenny Batts, 50, 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.
According to documents in this case and the evidence at trial:
Since 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, 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 $900,000.
Thompson, Askew, Sanders and Russell have previously pleaded guilty to their roles in the scheme and await sentencing.
The conspiracy charge carries a maximum potential penalty of five years in prison. The maximum sentence for aiding or assisting in the filing of false returns is three years in prison. Both are also punishable by a statutory maximum fine equal to the greatest of $250,000 or twice the gross amount of any pecuniary gain that any persons derived from the offense or twice the gross amount of any pecuniary loss sustained by any victims. Sentencing for Batts is scheduled for Jan. 16, 2020.
U.S. Attorney Carpenito credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge John R. Tafur, with the investigation leading to today’s conviction.
The government is represented by Assistant U.S. Attorneys Cari Fais and Jihee G. Suh and of the U.S. Attorney’s Office in Newark.