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Ohio Tax Preparation Business Executives Indicted for Nationwide Conspiracy and Other Tax-Related Crimes
Beavercreek, Ohio – Fesum Ogbazion, a Beavercreek resident, and Kyle Wade, formerly of West Chester, Ohio, were arrested today after being indicted on August 25 by a federal grand jury sitting in Dayton, Ohio, for conspiracy and tax-related crimes.
According to the 23-count indictment, Ogbazion and Wade were indicted on one count of impeding the administration of the Internal Revenue Code, one count of conspiracy to commit wire fraud, and five counts of wire fraud. Ogbazion is also charged with six counts of money laundering, one count of evasion of payment of employment taxes, eight counts of failure to collect and pay over employment taxes, and one count of bank fraud.
The indictment alleges that Ogbazion owned and controlled ITS Financial LLC, the national franchisor of Instant Tax Service (ITS), a tax preparation business Ogbazion founded that claimed to have more than 1,100 franchise locations throughout the United States in 2009. Wade was the vice president of financing for ITS and owned multiple ITS franchises.
From about January 2004 through November 2012, Ogbazion and Wade executed a scheme to obstruct the Internal Revenue Service (IRS), wherein numerous ITS franchises filed false federal income tax returns without valid Forms W-2 and without the permission of their taxpayer clients. The false returns included false and inflated sole proprietorship Schedule C income in an attempt to increase the Earned Income Tax Credit.
Ogbazion and Wade also conspired to generate loan and tax return preparation fees for ITS and its franchises by luring low-income and unsophisticated taxpayers into ITS franchises through a nationwide advertising campaign that offered customers tax refund anticipation loans. Despite the fact that ITS did not have an independent lender that could fund the promised loans, ITS collected loan application and tax preparation fees from its customers.
If convicted of impeding the administration of the Internal Revenue Code, the defendants face a statutory maximum sentence of three years in prison and a fine of up to $250,000. If convicted of conspiracy to commit wire fraud and wire fraud, the defendants face a statutory maximum sentence of 30 years in prison and a fine of up to $1 million.
Ogbazion failed to pay over approximately $1.26 million in payroll taxes due from ITS and TaxMate LLC during four tax quarters in 2009 and 2010. The indictment alleges that ITS generated more than $12.5 million in fees in 2010 and more than $3.1 million in fees in 2011 from the loan scheme.
The indictment also alleges that Ogbazion was responsible for ITS’ and TaxMate LLC’s federal employment payroll taxes. He evaded the IRS’ attempts to collect ITS and TaxMate federal payroll taxes by directing business revenue to nominee accounts, placing assets in the names of nominee entities, and making false statements to an IRS revenue officer during the course of collection activity, among other acts of concealment.
Key Facts
- State: Ohio
- Category: White Collar Crime
- Source: DOJ Press Release â†â€â€
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