Jonathan Wally, Tax Fraud and Identity Theft, New York 2013

Jonathan Wally, a 33-year-old Police Officer assigned to the 34th Precinct in the Washington Heights/Inwood section of New York City, was arrested yesterday in Bronx, New York, and charged with tax fraud and identity theft.

According to the Complaint unsealed yesterday in Manhattan federal court, Wally allegedly defrauded the IRS by causing it to issue tax refunds to other individuals based on fraudulent and false U.S. individual income tax returns prepared and filed by Wally on behalf of those taxpayers.

From 2010 through April 2012, Wally defrauded the IRS by causing it to issue tax refunds to other individuals based on fraudulent and false U.S. individual income tax returns prepared and filed by Wally on behalf of those taxpayers. During that time period and continuing through January 2013, Wally further defrauded the IRS by preparing and filing fraudulent and false tax returns on his own behalf that failed to declare certain income, causing him to receive tax refunds to which he was not entitled.

As a result of the false and fraudulent tax returns prepared and filed by Wally on behalf of other individuals, the IRS paid them at least $119,793 in fraudulent tax refunds. The false and fraudulent tax returns prepared and filed by Wally on his own behalf caused the IRS to pay him at least $4,850 in fraudulent tax refunds. In addition, from 2010 up to and including the present, Wally failed to pay the IRS at least $19,487 in income taxes that he owed based on income he earned as a tax preparer but failed to declare on his tax returns.

Wally, who served as a tax preparer for individuals since at least 2008, allegedly obtained personal identifying information of children and Social Security cards in the names of other children that he used to declare them as dependents on false and fraudulent tax returns he prepared and filed on behalf of others and himself.

Manhattan U.S. Attorney Preet Bharara said, “As alleged, Jonathan Wally was enforcing the law by day, and breaking it at night. Identity theft and tax fraud are urgent and widespread problems, and it is especially troubling when they are crimes committed by those entrusted with enforcing the law, as is alleged here.”

The case is being prosecuted by the U.S. Attorney’s Office for the Southern District of New York, with assistance from the Internal Revenue Service, Criminal Investigation, and the New York State Department of Taxation and Finance.

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