Donald S. Boyce, United States Attorney for the Southern District of Illinois, announced today that Eyob Tilahun, 30, of St. Louis, MO, was sentenced to 38 months in federal prison for defrauding the United States Treasury. Tilahun’s conviction and sentence arise from his operation of a fraudulent tax return preparation business known as Tax King, LLC.
Tilahun owned and operated several Tax King facilities located in St. Louis, MO. Tilahun also operated a Tax King located at 212 Collinsville Avenue in East St. Louis. On May 20, 2016, Tilahun pled guilty in Federal Court in East St. Louis to a charge of conspiring to submit false claims for tax refunds. As part of his guilty plea, Tilahun admitted that Tax King’s return preparers were trained and instructed to increase their customers’ refunds by falsifying certain information on their tax returns. The false information that was placed on the returns included: (1) false Business Income and Schedules Cs which caused the clients to qualify for larger Earned Income Credits (“EICs”); (2) false wages, which again caused the clients to qualify for larger EICs; (3) false education expenses which enabled the clients to qualify for American opportunity education credits; and (4) false information regarding fuel taxes which qualified the clients for federal fuel tax credits.
Tilahun admitted that he profited from the scheme by charging Tax King’s clients fees which ranged from approximately $400 to $650. The indictment in the case alleges that the return preparers also profited by requesting cash “tips” from the clients of approximately $100 to $1,000.
In addition to the 38-month prison sentence, Tilahun will be ordered to pay restitution to the United States Treasury. The exact amount of restitution will be determined at a later date, but is expected to exceed $2,000,000.
Two employees of Tax King were also sentenced today. Tanesa L. Beverly, 32, of East St. Louis, IL, and Melissa L. Wiley, 35, of Granite City, IL, were both sentenced to two years of probation. Beverly and Wiley both worked as return preparers at the East St. Louis Tax King for a couple of months during 2013. Both had previously pled guilty to participating in the conspiracy and filing false tax returns. In addition to their probation sentences, Beverly was ordered to pay $8,245 in restitution and Wiley was ordered to pay restitution of $13,401.
In addition to Tilahun, Beverly, and Wiley, four other defendants in the case have previously pled guilty. Those defendants are Mason B. Richmond, 31, of St. Louis, MO; Lakesha R. Wilson, 28, of East St. Louis, IL; Edric A. Russell, 35, of East St. Louis, IL, and Pierre J. Carter, 34, of East St. Louis, IL. Wilson, Russell, and Carter all worked as return preparers at the East St. Louis Tax King. Richmond worked as a return preparer at a Tax King on North Grand in St. Louis.
Tilahun, Beverly, and Wiley are scheduled to be sentenced on September 9, 2016. Sentencing for Richmond will be October 7, 2016. Russell and Carter will be sentenced on January 27, 2017. Wilson’s sentencing hearing is scheduled for February 3, 2017.
The investigation is being conducted by agents from both the Fairview Heights, Illinois, and St. Louis, Missouri Offices of the Internal Revenue Service – Criminal Investigation. The case is being prosecuted by Assistant United States Attorney Scott A. Verseman. The United States Attorney’s Office for the Eastern District of Missouri has also prosecuted several return preparers who worked at Tax King locations in St. Louis, MO.