FilAm CPA faces nine years, P36-M fine in Chicago for tax fraud

A 60-year-old Filipino American Certified Public Accountant Pepito O. Guinto and his brother, Pablo, are facing nine years imprisonment and $750,000 (equivalent to P36.5 million) fine in Chicago for allegedly preparing fraudulent income tax records. US District Court Judge Milton I. Shadur of the Northern District of Illinois in Chicago set Guinto’s sentencing on April 27, 2007 after he pleaded guilty on Feb 9 to the criminal offense. Guinto, who is out on bail on his own recognizance, will be compelled to pay up $6,000 bond if he fails to show up at the sentencing. Filipino reporter Joseph Lariosa reported in Manila Mail DC on Tuesday that while the plea does not bind the court, Guinto has waived his right to a jury or bench trial by pleading guilty. Guinto and his co-defendant, his younger brother, Pablo, 48, were in the business of preparing or assisting in the preparation of tax returns at his own Pepito O. Guinto, CPA, at 4411 N. Clark St., Chicago from 1999 thru 2002. Pepito and Pablo Guinto were each indicted with eight counts of violation of Title 26, United States Code Section 7206(2), which is the filing of tax fraud and false statements. The brothers were both born in Tondo, Manila and are both naturalized US citizens. Pablo has allegedly fled from the United States and is believed to be in the Visayas where he is living with his wife, Desiree, a registered nurse. The Guinto brothers subtracted from their adjusted gross income certain medical expenses, interest paid on home mortgage loans, charitable contributions, state and local taxes, and unreimbursed employee business expenses such as union dues, uniforms and supplies also known as itemized deductions in the Schedule A of federal income tax form 1040. Lariosa reported that the two were able to decrease their taxpayer clients’ taxable incomes, either fraudulently reducing their tax liability or inflating their refunds, although the taxpayers were not entitled to the amount of refund claimed or a portion of the refund claimed, causing a total tax loss of at least $124,802 from 56 Individual Tax Returns (Forms 1040 and 1040X) for tax years 1999, 2000, 2001 and 2002. Out of the 4,780 clients of Pepito from 2000 to 2002, 57 of them had false medical expenses, charitable contributions and unreimbursed job expenses involving refund to clients, which results to the Internal Revenue Service incurring losses totaling $124,802. In Pablo’s case, out of his 1,868 clients from 2000 to 2002, 34 of them had false and fraudulent loss of the US Treasury of $42,969. For their services, the Guinto brothers were paid from $25 to $1,438 per return by docking their fees from their clients’ refunds. The plea agreement, signed by Guinto and his lawyer, Patrick Cotter, and US Attorney Patrick J. Fitzgerald and Assistant US Attorney Michelle Nasser Weiss, stipulates that 'each count' carries a 'maximum penalty of three years imprisonment, a maximum fine of $250,000, assessment for the costs of prosecution, estimated to be $500, as well as a term of supervised release of at least two years and not more than three years, which the Court may specify. Therefore, the maximum potential penalties are nine years imprisonment, a $750,000 fine, and a term of supervised release, Lariosa reported from Chicago. A colleague of Mr. Guinto noted that “a lot of tax preparers are doing what Mr. Guinto was doing, unfortunately for him, he was caught when somebody complained." Homestead rebate checks Five other Filipino Americans were also indicted Feb 5 on charges that they conspired to steal $573,383 from the state of New Jersey by submitting fraudulent applications for 745 homestead rebate checks. Achilles “Butz" Amante, 55; his sister, Matilda Amante Ramos, 56; and his three sons, Aristides, 27; Amorito, 33; Aloysius, 31; and American Paul Sarris, 50, were indicted by a state grand jury on charges of first-degree conspiracy, first-degree money laundering and second-degree theft by deception. They allegedly conspired to steal $573,383 from the state of New Jersey by submitting fraudulent applications for 745 homestead rebate checks. The San Francisco-based Philippine News earlier reported that the Amantes operated their own financial service companies offering tax preparation services between August 2001 and September 2003. During this period, they reportedly filed 745 false homestead rebate applications with the State of New Jersey, including multiple applications for each of 15 residential and commercial addresses they rented in Jersey City. The defendants allegedly filed the applications using names and Social Security numbers obtained from tax preparation clients, without permission of the clients. The 12-page agreement in the Chicago case indicated that ‘upon entry of judgment of conviction, the defendant will be assessed $100 on each charge to which he had pled guilty, for a total of $300, in addition to any other penalty imposed. The defendant agrees to pay the special assessment of $300 at the time of sentencing with a cashier’s check or money order made payable to the Clerk of the U.S. District Court." - GMANews.TV