Underreporting Income Produces Fraud


According to the Internal Revenue Service (IRS), the favorite form of tax evasion in the United States happens to be underreporting income. This happens when a taxpayer either claims less money than they actually made or they claim more deductions, exemptions and credits than rightfully deserved. A Washington man evaded paying taxes over four years by underreporting his income.

The fraudster in today ‘s case owned and operated a produce sales business. Over the four-year period in which he operated his company, he filed fraudulent income tax returns for each year, neglecting to report about $564,292. (We’re not talking about just a few heads of lettuce, a couple of squash or a bushel of apples here. It ‘s more like he failed to report the income from the sale of a massive buffet that went on for four years.)

The 46-year-old produce company owner pleaded guilty to filing a fraudulent tax return and admitted causing a tax loss of approximately $183,191. At sentencing, he will face a maximum sentence of three years in prison, supervised release, restitution and monetary penalties.

This man appeared to have four pretty good years of business, but he stuffed himself on greed and neglected to report his true income. (Perhaps there were extenuating circumstances where he felt like he couldn’t make ends meet if he reported his true income.) Let’s hope that when this man is sentenced, he will heed this advice in the future, if you owe taxes, make sure you pay them.

Source: Today’s “Fraud of the Day” is based on a Department of Justice press release entitled, “Washington Businessman Pleads Guilty to Filing Fraudulent Federal Tax Return,” released on February 16, 2017.

A Chelan Falls, Washington man pleaded guilty yesterday in the U.S. District Court in Yakima, Washington to filing a fraudulent 2011 federal tax return, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division.

According to documents filed with the court, from 2009 through 2012, Jose L. Echeverria, 46, owned and operated a produce sales business. Echeverria filed fraudulent individual income tax returns for each of these years and underreported his income by a total of approximately $564,292. Echeverria admitted that he caused a tax loss of approximately $183,191.

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Larry Benson, Senior Director of Strategic Alliances, LexisNexis Risk Solutions - Government

Larry Benson is responsible for developing strategic partnerships and solutions for the government vertical. His expertise focuses on how government programs are defrauded by criminal groups, and the approaches necessary to prevent them from succeeding.

Mr. Benson has 30 years of experience in sales and business development. Before joining LexisNexis® Risk Solutions, he spent 12 years founding and managing two software technology startups. During the 1990s he spent 10 years as a Regional Director helping to grow a New England-based technology company from 300 employees to 7,000. He started his career with Martin Marietta Aerospace working on laser guided weapons and day/night vision systems.

A sought-after speaker and accomplished writer, Mr. Benson is the principal author of “Fraud of the Day,” a website dedicated to educating government officials about how criminals are defrauding government programs. He has co-authored WTF? Where’s the Fraud? How to Unmask and Stop Identity Fraud’s Drain on Our Government, and Data Personified, How Fraud is Changing the Meaning of Identity.

Benson holds a Bachelor of Science in Physics from Albright College, and earned two graduate degrees – a Master of Business Administration from Florida Institute of Technology, and a Master of Science in Engineering from Lehigh University.