Lawfuel.com – United States Attorney
Southern District of New York
U.S. ATTORNEY’S OFFICE
JANUARY 20, 2011 ELLEN DAVIS,
PREET BHARARA, the United States Attorney for the
Southern District of New York, and CHARLES R. PINE, the Special
Agent-in-Charge of the New York Field Office of the Internal
Revenue Service (“IRS”), Criminal Investigation Division,
announced that LESTER MORRISON, a tax preparer who was the leader
of a tax fraud scheme that resulted in the issuance of more than
$28 million in fraudulent refunds, was sentenced in Manhattan
federal court to 72 months in prison for his role in the
conspiracy. MORRISON was also ordered to pay restitution of
$17.3 million to the IRS. The sentence was imposed by U.S.
District Judge SIDNEY H. STEIN.
According to the Superseding Indictment and statements
made during MORRISON’s guilty plea and sentencing proceedings:
Since at least 2000, MORRISON and his co-defendants,
PAULETTE BULLOCK, KEVIN VADEN, GARY HANNA, and JOY DAVID, filed
more than 7,500 returns – most of them fraudulent – through a tax
preparation business with locations in the Bronx and New Jersey.
MORRISON, BULLOCK, VADEN, HANNA, and DAVID employed a
variety of deceptive practices to carry out their tax fraud
scheme, and claim more than $28 million in refunds. These
included, among others: (1) using stolen identities of deceased
children to falsely claim them as dependents on clients’ returns;
(2) claiming “business losses” from fictitious businesses; (3)
claiming as deductions thousands of dollars in non-existent
charitable contributions and miscellaneous job expenses; (4)
falsely claiming credits for education expenses; and (5) falsely
claiming credits for child-care expenses. Each of the defendants
earned inflated commissions and fees related to the fraudulent
refunds they generated.
MORRISON was the leader of the conspiracy, opening the
tax preparation business in the Bronx, and later assisting in
preparing tax returns at the New Jersey locations. MORRISON also
conducted a class for his co-defendants during which he explained
how to prepare fraudulent returns.
* * *
This case was part of “Operation Brass Tax,” a joint
investigation conducted by the U.S. Attorney’s Office for the
Southern District of New York and the IRS. Operation Brass Tax
was the largest coordinated takedown of corrupt tax preparers in
MORRISON pled guilty in August to one count of
conspiracy to defraud the IRS and one count of obstructing the
administration of internal revenue law.
MORRISON’s co-defendants, PAULETTE BULLOCK, JOY DAVID,
KEVIN W. VADEN, and GARY HANNA previously pled guilty and will be
sentenced before Judge STEIN. BULLOCK, 52, of Oxford, North
Carolina, is scheduled to be sentenced on February 4, 2011.
DAVID, 29, of Ridgefield, New Jersey, is scheduled to be
sentenced on January 21, 2011. VADEN, 47, of Amityville, New
York, and HANNA, 30, of Ridgefield, New Jersey, are scheduled to
be sentenced on March 3, 2011.
Mr. BHARARA thanked the IRS, which investigated the
case. He also thanked the U.S. Department of Justice’s Tax
Division for their assistance.
This case is being prosecuted by the Office’s Complex
Frauds Unit. Assistant U.S. Attorneys JAMES PASTORE, SANTOSH
ARAVIND, and E. DANYA PERRY are in charge of the prosecution.