Los Angeles, California – LAWFUEL – The Law Newswire – This morning in United States District Court in Los Angeles, two women pleaded guilty to charges that they conspired to defraud the Internal Revenue Service by preparing income tax returns that falsely claimed that their clients had earned income, supported dependents, and were entitled to refunds.
Carolyn Ann Feast, of Fontana, and her sister, Barbara Ann Clewis, of Redlands, both entered guilty pleas before United States District Judge Stephen V. Wilson to criminal counts set forth in a criminal information that detailed their tax fraud scheme.
According to the criminal information and plea agreements filed in this case in US District Court, Feast began preparing income tax returns for clients out of her home in 1999. In 2000, Feast started a tax preparation business known as, “Computer and Accounting Network” located in Fontana, California. Clewis assisted her sister in the preparation of income tax returns for Computer and Accounting Network’s clients.
According to their plea agreements, both Feast and Clewis would solicit numerous clients to use their income tax preparation services. Feast and Clewis would then prepare false wage statements and business tax schedules and add the forms to their clients’ income tax returns. Additionally, Feast and Clewis would buy and sell the personal biographical information of various individuals and use that information on their clients’ income tax returns to create fictitious dependents. As a result of fabricating income and dependent information on their clients’ federal income tax returns, Feast and Clewis’ clients would fraudulently claim Earned Income Tax Credits and inflated refunds to which they were not entitled.
In addition to preparing false and fraudulent tax returns for their clients and submitting the returns to the Internal Revenue Service, Feast and Clewis would, in some cases, solicit refund anticipation loans on behalf of their clients from financial institutions, typically without their clients’ knowledge. In some instances, Feast and Clewis would split the proceeds of the refund anticipation loans with their clients on a 50 / 50 basis.
Both Feast and Clewis face a statutory maximum of five years in federal prison and a fine of up to $1,000,000 when sentenced for their crimes. Judge Wilson set sentencing for both women for October 1, 2007.
The investigation of both Feast and Clewis was conducted by IRS – Criminal Investigation in Los Angeles.
