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California Dentist Sentenced for Filing False Tax Returns

Written by TaxSqueal. Posted in Blog, Tax Fraud Cases

On November 18, 2010, in San Diego, Calif., Lewis Donald Guess was sentenced to serve 18 months in federal prison for filing false income tax returns. According to court documents, Guess, a dentist, owned and controlled the xélan Family of Companies, which specialized in financial planning and aggressive tax management for medical professionals. Guess also controlled the xélan Foundation, which purported to be a public charity. In June 2010, Guess was found guilty of filing false and fraudulent U.S. Individual Income Tax Returns for calendar years 2001 and 2002 by falsely claiming that he donated $800,000 worth of stock to the xélan Foundation, a charity that he controlled. In finding the defendant guilty the Court found that Guess manipulated his employees and tax professionals to “slice and dice” the preparation of his tax returns for the years 2001 and 2002. Guess backdated documents and engaged in an illusory “shell game” to support the false charitable deduction on his tax returns.

Chief Financial Officer of Pizzeria Sentenced on Embezzlement and Tax Charges

Written by TaxSqueal. Posted in Recent Tax Fraud Cases, Tax Fraud Cases

On November 19, 2010, in Cleveland, Ohio, Vince Romito was sentenced to 27 months in prison and ordered to pay more than $350,000 in restitution.  Romito, of Brunswick, Ohio, pleaded guilty on November 1, 2010, to making, uttering or possession of forged securities and five counts of filing false income tax returns.  According to court documents, Romito worked as controller and chief financial officer for Zeppe’s Pizzeria, a pizza chain headquartered in Bedford Heights.  He admitted that in that capacity, he embezzled $291,034 from July 2004 through April 2009.  Romito caused Zeppe’s to issue 166 checks, purportedly for business expenses, that were actually for his own personal expenditures, according to court documents.  Romito also failed to report this income on his personal income tax returns filed between 2004 and 2008, resulting in $68,023 additional taxes due and owing.

West Virginia Man Sentenced on Tax Fraud Charges

Written by TaxSqueal. Posted in Tax Fraud Cases

On April 15, 2010, in Beckley, W.Va., Philip H. Weber, aka Spider, of Raleigh County, was sentenced to 30 months in prison, to be followed by one year of supervised release, and ordered to pay a $100,000 fine.  Weber pleaded guilty to filing a false tax return on August 20, 2009, which resulted in a total tax loss of $592,000.  According to court documents, Weber owned and operated a nationwide motorcycle apparel retail business. From 2000 through 2004, Weber traveled to motorcycle rallies all over the United States and sold items such as leather jackets, chaps and T-shirts. He conducted his business primarily in cash, maintained no business bank accounts, paid employees in cash, falsely claimed a Wyoming residence to avoid state income taxes, failed to maintain customary business records, provided his accountant with false information, and systematically converted cash he received from sales into money orders and cashier checks.  In addition, he instructed his employees to structure their purchases of money orders in amounts that were just under the reporting postal requirements, and transferred a substantial portion of his assets into the name of his ex-wife.

New Jersey Man Sentenced to Prison for Conspiring to Defraud the IRS

Written by TaxSqueal. Posted in Tax Fraud Cases

On April 19, 2010, in Camden, N.J., Luciano Di Salvatore, of Sicklerville, was sentenced to twelve months and one day in prison, two years of supervised release and ordered to pay $96,038 in restitution and a $5,000 fine.  Di Salvatore pleaded guilty on November 23, 2009, to an Information charging him with conspiracy to defraud the Internal Revenue Service (IRS).  According to court document, Di Salvatore admitted participating in a scheme to shield income generated from the sale of a business called Municipal Code Inspection, Inc.  Municipal Code was a building inspection company which contracted with municipalities to perform building, plumbing, fire, electrical and elevator inspections on behalf of the municipalities.  Di Salvatore admitted that he met with Municipal Code’s accountant, Victor Fabietti, Jr. to discuss that the payment of $165,000 from Municipal Code to Michael Schaffer should be characterized as a loan to make it more favorable to Schaffer for income tax purposes.  Both Fabietti and Schaffer have pleaded guilty in this investigation; they are awaiting sentencing.

Missouri Man Sentenced for Filing False Tax Returns

Written by TaxSqueal. Posted in Tax Fraud Cases

On April 1, 2010, in St. Louis, Mo., Patrick Moriarty, of Troy, Missouri, was sentenced to 12 months and one day in prison and ordered to pay $135,697 restitution to the Internal Revenue Service (IRS).  Moriarty pleaded guilty in January 2010 to one count of filing a false tax return for the year 2003.  According to court documents, Moriarty falsified his tax return for the year 2003.  For the year 2002, Moriarty under reported his business income.  For 2003, he falsely claimed that he had legal fees of $30,000.  For 2004 and 2005, he falsely claimed that he had over $20,000 in taxes withheld from his earnings.  The total tax loss is $135,697.