CPA Nicholson Gets 5 Years for $740K Tax Scam

HATTIESBURG, MS – Carl Nicholson, a once-respected certified public accountant (CPA), traded his professional license for a five-year prison sentence today, slammed with the punishment in federal court for a brazen tax fraud scheme. Nicholson, convicted earlier this year, systematically falsified returns, costing American taxpayers hundreds of thousands of dollars.

The Department of Justice (DOJ) announced the sentencing, a clear message from Principal Deputy Assistant Attorney General Richard E. Zuckerman: “Today’s prison sentence for CPA Nicholson should serve as a reminder that the Department of Justice will prosecute fraudulent tax return preparers, who violate this nation’s tax laws, and that the penalties for such conduct include significant prison time.”

U.S. Attorney Mike Hurst for the Southern District of Mississippi echoed the sentiment, adding a pointed rebuke: “Carl Nicholson abused his position of trust as a CPA and defrauded Mississippians and American taxpayers. This case illustrates that no one is above the law, that our tax laws will be vigorously enforced, and that justice will always be done in the Southern District of Mississippi.”

The jury found Nicholson guilty on February 8, 2019, of conspiracy to defraud the United States, six counts of aiding in the preparation of false tax returns, and four counts of filing false tax returns. Court documents revealed that between 2012 and 2014, Nicholson colluded with a client to reclassify $740,000 in personal payments as legitimate business expenses. The scheme involved filing these falsified returns with the Internal Revenue Service (IRS). But the deception didn’t end there. Nicholson was also convicted of filing his own fraudulent personal income tax returns from 2012 through 2015, falsely claiming expenses, concealing embezzled income, and underreporting profits from the sale of his accounting firm, Nicholson & Company.

U.S. District Court Judge Keith Starrett didn’t just hand down a prison sentence. He also ordered Nicholson to serve three years of supervised release following his incarceration, pay a hefty $25,000 fine, and make full restitution of $629,432 to the IRS. The financial impact of Nicholson’s greed extends far beyond his own legal troubles.

The investigation, a joint effort by special agents of IRS-Criminal Investigation and investigators with the Mississippi Auditor’s Office, brought the scheme to light. Assistant United States Attorney Jay Golden and Trial Attorney Kim Shartar of the Tax Division successfully prosecuted the case, securing a conviction and ensuring Nicholson will answer for his crimes. This case serves as a stark warning: manipulating the tax system carries severe consequences, even for those entrusted with upholding financial integrity.