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LBS Tax Services Owner, Franchisees Face Tax Fraud Charges
The United States filed eight civil injunction suits in Florida to bar Walner G. Gachette, the founder of Orlando-based tax preparation company LBS Tax Services, seven LBS Tax Services franchisees, and three LBS Tax Services managers from owning, operating, or franchising a tax return preparation business and preparing tax returns for others.
The seven franchisees and three managers sued are Douglas Mesadieu, Jean R. Demesmin, Kerny Pierre-Louis, Demetrius Scott, Jason Stinson, Wilfrid Antoine, Jacqueline Nunez, Tonya Chambers, Jehoakim Victor and Lauri Rodriguez.
According to the complaints, in 2013, LBS Tax Services operated at least 239 stores (192 owned by the named defendants) in Florida, North Carolina, South Carolina, Georgia, Texas, Tennessee, Alabama and Mississippi. The government also asserts that LBS Tax Services prepared more than 55,000 federal income tax returns in 2013.
The suits allege that the defendants target primarily low-income customers with deceptive and misleading advertisements, prepared and filed fraudulent tax returns to falsely increase their customers’ refunds and profit through unconscionable and exorbitant fees — all at the expense of their customers and the U.S. Treasury.
“The public should be able to rely on federal income tax preparers to prepare honest and complete returns,” said Deputy Assistant Attorney General David A. Hubbert for the Justice Department’s Tax Division. “The Internal Revenue Service and the Department of Justice have made it a priority to sue and enjoin tax return preparers who prepare fraudulent returns.”
Among the many examples cited in the eight complaints are a customer in Tampa, Florida, who was allegedly waiting at a bus station when he was approached by an LBS Tax Services employee, who offered to drive the customer to an LBS Tax Services store to have his tax return prepared. Despite knowing that the customer did not have a car, LBS Tax Services reported on the customer’s tax return that he had driven his personal vehicle 30,256 miles for business purposes, resulting in a bogus $17,589 unreimbursed employee business expense claimed on the customer’s tax return.
A customer was allegedly approached at a flea market by an LBS Tax Services preparer who told her that she had to file a tax return, showed her a badge, and said that he was a police officer and would not do anything that was wrong. That preparer allegedly prepared the customer’s tax return, on which the preparer falsely claimed that the customer had more than $10,000 in income in order to claim an Earned Income Tax Credit and bogus refund.
Another customer in Houston, Texas, won $250,000 in the lottery in 2012. The LBS Tax Services preparer allegedly claimed several phony deductions to offset that income, including $30,141 in charitable contributions and $10,279 in unreimbursed employee business expenses. The customer’s tax return allegedly claimed a bogus refund of more than $3,000 “per child”.
Key Facts
- State: Florida
- Category: White Collar Crime
- Source: DOJ Press Release ↗
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