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Published: Jun 21, 2024
by Michael Guta
In Small Business News
A Florida tax return preparer has been sentenced to 30 months in prison for his role in a conspiracy to defraud the United States by preparing and filing false tax returns. John Borgela, who ran Empire Tax Services (Empire), was also sentenced to two years of supervised release and ordered to pay $970,970 in restitution. The sentencing was announced today, highlighting the significant efforts by the Justice Department and IRS to crack down on tax fraud.
From 2017 through 2020, Borgela, along with his co-conspirator Phedson Dore, engaged in a scheme to file hundreds of fraudulent tax returns each year. According to court documents and statements made in court, Borgela inflated tax withholdings and reported fictitious itemized deductions on behalf of his clients. This manipulation resulted in clients receiving refunds to which they were not legally entitled. To hide his involvement in the fraudulent activities, Borgela avoided listing his name as the preparer on the tax returns. Instead, he used the names of his employees and the electronic filing identification numbers (EFINs) of other tax preparation businesses, further complicating the tracking of the fraud.
Borgela’s actions caused a loss of approximately $970,000 to the IRS. His co-conspirator, Phedson Dore, was previously sentenced in February to 24 months in prison for his involvement in the conspiracy. The sentencing of both individuals underscores the serious consequences of tax fraud and the commitment of federal authorities to pursue justice in such cases.
Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Roger B. Handberg for the Middle District of Florida made the announcement. They emphasized the importance of maintaining the integrity of the tax system and the efforts to hold accountable those who attempt to undermine it through fraudulent means.
The case was investigated by IRS Criminal Investigation, which played a crucial role in uncovering the details of the conspiracy. Their investigation revealed the extent of the fraud and the methods used by Borgela and his co-conspirator to deceive the IRS.
Trial Attorneys Brian Flanagan and Marissa Brodney of the Justice Department’s Tax Division, along with Assistant U.S. Attorney Shannon Laurie for the Middle District of Florida, prosecuted the case. Their diligent work in bringing this case to court demonstrates the ongoing efforts of the Justice Department to combat tax fraud and protect the interests of honest taxpayers.
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Michael Guta is the Assistant Editor at Small Business Trends and has been with the team for 9 years. He currently manages its East African editorial team. Michael brings with him many years of content experience in the digital ecosystem covering a wide range of industries. He holds a B.S. in Information Communication Technology, with an emphasis in Technology Management.
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