ITS Financial Accused of Pervasive Tax Fraud, Seeking $16 Million in Losses

The United States has filed civil injunction lawsuits in five cities to shut down both ITS Financial LLC, which operates Instant Tax Service, and five owners of ITS franchises.

According to government complaints filed in the cases, ITS Financial LLC, headquartered in Dayton, operates what it claims is the nation’s fourth-largest tax-preparation business. ITS Financial and its owner, Fesum Ogbazion, are accused of deliberately ignoring systemic and pervasive fraud by ITS franchisees.

The complaints allege that ITS franchisees across the country intentionally prepare and file fraudulent tax returns to maximize their customers’ refunds. They do so, according to the complaints, so that ITS Financial and its franchisees can extract large tax preparation fees, as well as various charges that Fesum Ogbazion refers to as “junk fees,” directly from their customers’ refund checks.

The franchisees named in the complaints allegedly invent phony businesses, fabricate deductions, falsify filing statuses, claim bogus dependents and disregard rules for claiming the earned income tax credit.

The complaint against ITS Financial states that the estimated tax losses from allegedly fraudulent return preparation in 2011 at ITS locations in St. Louis, Kansas City, Chicago, Indianapolis, and Las Vegas exceed $16 million.

Fesum Ogbazion allegedly said that he intentionally does not track complaints of fraud made against his ITS franchisees because he “wouldn’t be able to sleep” at night.

“Hard-working Americans deserve to rest assured that their tax return preparers are not ripping them off,” said John A. DiCicco, Principal Deputy Assistant Attorney General of the Justice Department’s Tax Division.

Defendant: ITS Financial LLC

Criminal Charges: Pervasive Tax Fraud

City and State: Dayton, Ohio

Date: Not specified

Sentence or Outcome: Ongoing lawsuit

Dollar Amount: $16 million in estimated tax losses

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