Teferi and Berhane, Tax Evasion and Consumer Protection Violations, Ohio 2023
Los Angeles, CA - In a major crackdown on abusive tax practices, a federal court in Los Angeles has permanently barred a Rancho Palos Verdes couple and their company from engaging in certain tax-preparation practices, the Justice Department announced today.
A complaint filed in the U.S. District Court for the Central District of California alleged that Henock Teferi and Ruth Berhane, former owners of a Los Angeles-area Instant Tax Service franchise, operated offices at multiple locations in the Los Angeles area until 2011. During that time, defendants' employees allegedly engaged in a variety of misconduct, including preparing tax forms with unsubstantiated business income, falsely claiming education credits, improperly claiming false filing status, reporting false dependents, selling deceptive loan products, and preparing tax returns based on information from employee paystubs rather than employer-issued W-2 forms.
The permanent injunction order, signed by Judge Michael Fitzgerald, bars the defendants from violating federal tax laws and consumer protection laws. The order requires an outside monitor to review a sample of tax returns that the defendants prepare in connection with their current tax preparation business, and report to a designated representative of the United States to ensure compliance with the injunction. The order also bars the defendants from marketing abusive loan products, including holiday or instant cash loans or advance loan products offered to customers based on information obtained from customers' paystubs.
Teferi and Berhane consented to the permanent injunction without admitting the allegations against them.
The Justice Department brought five civil injunction suits against Instant Tax Service and some franchisees last year. One of those suits is pending against the nationwide franchisor of Instant Tax Service and its owner, Fesum Ogbazion, in Dayton.
In the past ten years, the Tax Division has obtained hundreds of injunctions to stop the promotion of tax-fraud schemes and the preparation of fraudulent returns.
Teferi and Berhane's company, Plover Financial Services LLC, was ordered to cease and desist from violating federal tax laws and consumer protection laws.
The court's order requires an outside monitor to review a sample of tax returns prepared by Teferi and Berhane's current tax preparation business.
Henock Teferi and Ruth Berhane, the defendants in this case, were former owners of a Los Angeles-area Instant Tax Service franchise.
Defendant/respondent: Henock Teferi, Ruth Berhane, and Plover Financial Services LLC
Criminal charges: Violating federal tax laws and consumer protection laws
City and state: Rancho Palos Verdes, California
Exact date: Not specified
Sentence or outcome: Permanent injunction order requiring outside monitor
Dollar amounts: Not specified
Key Facts
- State: Ohio
- Category: White Collar Crime
- Source: DOJ Press Release â†â€â€
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