Tax Tricks and Fraudulent Loopholes

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Income tax docs with hand and pen on table

Being a professional athlete can be very lucrative. But according to Craig Brown of NKSFB, about 78% of professional athletes go broke after retirement. One way to protect the nest egg is to know the tax loopholes which favor the wealthy. Seir Robinson Havana, CEO of Mana Tax Services, claimed he was the expert who could get the big tax refunds which is why 9 professional athletes went to him. But Havana was a fraud and on July 20, 2022, Havana plead guilty to his part in a fraud scheme totally $25 million that included exaggerated tax returns for the professional athletes and exploiting federal pandemic relief programs for himself and co-conspirators.

Starting May of 2019 through November 2021, Havana participated in a scheme to prepare and file with the IRS a series of false and fraudulent income tax returns for nine professional athletes, which included fabricated businesses and exaggerated losses. Athletes were charged a fee of 30% of the resulting refund. To conceal the payments, Havana directed the athletes to send the fee to shell entities he controlled. In all, Havana collected more than $3.1 million in fees from the professional athletes.

Then Covid came and with it a second fraud scheme. The Paycheck Protection Program (PPP) was designed by the US government to keep companies operating during the pandemic. From April of 2020 through December of 2021, Havana filed PPP applications in the names of the shell entities opened by him to conceal the payments from the tax refund scheme. The co-conspirators grossly inflated the number of employees and monthly payroll costs claimed on the PPP loan applications and submitted fabricated tax returns in support of the applications.

During the investigation, the government seized more than $11.8 million from bank accounts containing PPP loan fraud proceeds controlled by Havana and others. In addition, Havana surrendered cashier’s checks worth approximately $5.6 million, representing a portion of the fees charged to professional athletes for the preparation of their false tax returns. The two schemes resulted in total losses to the government of more than $25 million.

Great job to the Internal Revenue Service for catching this double fraud.

Today’s “Fraud of the Day” is based on an article posted in the Huntington Beach News on July 18, 2022.

Second Defendant Pleads Guilty to Multimillion Dollar Tax Fraud Scheme

by: Ciaran McEvoy
A San Fernando Valley certified public accountant pleaded guilty today to a federal criminal charge for helping a long-time client fraudulently obtain a $1.2 million COVID-19 business loan by knowingly preparing a false corporate tax return on the client’s behalf.

Bernard Turk, 73, of Tarzana, pleaded guilty to one count of wire fraud, a crime that carries a statutory maximum sentence of 20 years in federal prison.

 

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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.