Efrain Arturo Jovel, Tax Fraud, California 2014

SAN FRANCISCO – Efrain Arturo Jovel, a 64-year-old Santa Rosa resident and owner of a tax preparation business, was sentenced to 18 months in prison for filing false tax returns and failing to report his financial interest in foreign bank accounts, U.S. Attorney Melinda Haag and Internal Revenue Service, Criminal Investigation Special Agent in Charge José M. Martinez, announced.

According to the plea agreement, Jovel owned and operated a tax return preparation business for over 30 years, first out of his home, then out of offices on Guerneville Road, both in Santa Rosa, Calif. On average, Jovel prepared approximately 1,800 tax returns per year. Jovel admitted that for the tax years 2009 and 2010, he filed personal U.S. Individual Income tax returns that were false in that he did not disclose his foreign bank accounts at Banco HSBC Salvadoreno, S.A. and Banco Reformador, S.A.

In addition, Jovel did not disclose interest income of $35,104 earned in 2009 and 2010 on the funds held in these foreign bank accounts. Jovel additionally admitted that he willfully underreported gross receipts from his tax preparation service of $244,120 and $307,846, respectively. This resulted in a tax loss of $175,023. Jovel further agreed to pay a penalty of $287,896 prior to sentencing.

Jovel was charged on September 9, 2014, with one count of willfully violating foreign bank account reporting requirements and two counts of subscribing to false tax returns. The sentence was handed down by the Honorable Richard Seeborg, U.S. District Court Judge.

In addition to the 18-month sentence, Jovel was also sentenced to a three-year period of supervised release, ordered to pay restitution of $175,023 and a $10,000 fine. Assistant U.S. Attorney Colin Sampson is prosecuting the case. The prosecution is the result of an investigation by the IRS – Criminal Investigation.

Jovel pleaded guilty on October 21, 2014, to willfully failing to report his financial interest in several foreign bank accounts, in violation of 31 U.S.C. §§ 5314 and 5322(a), and to knowingly signing his false 2009 and 2010 federal income tax returns.

The case is a reminder that tax preparers have a responsibility to report their clients’ income accurately and to disclose their own financial interests. Jovel’s actions not only cheated the government out of tax revenue, but also undermined the public’s trust in the tax system.

As a result of Jovel’s conviction, the IRS will be able to recover the tax loss of $175,023 and the penalty of $287,896. The case serves as a warning to others who may be tempted to engage in similar behavior.

Related Federal Cases