Omar Faruq, Tax Fraud, Pennsylvania 2019

PHILADELPHIA, Pennsylvania – A shocking tale of deceit and corruption has unfolded as two tax preparation duo from New Jersey pleaded guilty to a string of crimes, leaving taxpayers in the dark.

Omar Faruq, 37, of Pennsauken, New Jersey, and his co-conspirator Omar Ali, 36, also of Pennsauken, New Jersey, were brought to justice after entering pleas of guilty before United States District Court Judge Nitza I. Quiñones on one count each of conspiracy to defraud the Internal Revenue Service, aiding another in the filing of a false tax return, and filing a false tax return.

According to a criminal Information filed in April 2019, Faruq and Ali conspired to file false tax returns on behalf of their clients at Omar Consultancy Inc., a tax service operated by them with offices in Pennsylvania and New Jersey.

The plea memorandum filed for today’s court appearance revealed that Faruq and Ali consistently used false filing status, false Schedule A deductions and expenses, false Schedule C business income and losses, and fictitious credits to decrease clients’ tax liabilities, all of which resulted in increased refunds for many of their clients. Faruq diverted portions of his clients’ returns to his own bank account as part of the conspiracy, totaling more than $300,000, and Ali diverted over $170,000 to his own bank accounts.

In addition to their crimes against their clients, Faruq and Ali also pled guilty to filing a false income tax return for themselves and their respective spouses for tax year 2014. In filing the false returns, Faruq and Ali omitted gross receipts from their tax preparation business on the 2014 tax returns and failed to report diverted funds from taxpayer-clients as income on their personal returns.

“Our tax system depends on the honesty of all citizens to truthfully file their tax returns, many of whom rely on professionals to represent their interests and to do the work honestly,” said U.S. Attorney William M. McSwain. “Tax preparers like Faruq and Ali undermine the tax system when they prepare and file false tax returns for their clients. My Office will aggressively investigate and prosecute tax preparers like the defendants who profit by turning their tax preparation services into fraud factories.”

The case was investigated by the Criminal Investigation Division of the Internal Revenue Service, and is being prosecuted by Assistant United States Attorney Richard P. Barrett.

In a statement, Special Agent in Charge John R. Tafur of IRS Criminal Investigation said, “While most return preparers provide excellent service to their clients, a few unscrupulous tax preparers file false and fraudulent returns to defraud the government, the tax-paying public and their own clients.”

Faruq and Ali are currently facing consequences for their actions, and their sentencing is pending.

Source: https://www.justice.gov/usao-edpa/pr/new-jersey-tax-prep-duo-plead-guilty-fraud-filing-false-returns-themselves-and-clients