HOUSTON - Diane Caldwell Larry has entered a plea of guilty for falsifying client tax returns, announced United States Attorney Kenneth Magidson along with Lucy Cruz, special agent in charge of Internal Revenue Service-Criminal Investigation (IRS-CI).
During her plea hearing today, Larry admitted that while operating a tax return preparation service under the name Paradise South Tax Services, she prepared 33 materially false client tax returns for tax years 2007 through 2010. Those returns generated excessive refunds and caused aggregate losses to the IRS totaling approximately $168,792. Larry acknowledged she had included in these client tax returns fraudulent “side business" losses and false and excessive itemized deductions and credits in order to generate excessive refunds. When some of these tax returns were audited, Larry made up false documents to create an illusion of legitimacy for some of the false and excessive itemized deductions and credits.
Specifically, Larry admitted she knowingly and willfully included a false $84,215 business loss deduction for a non-existent “side business" as well as false deductions for uniforms upkeep, toll bridge fees, job-related tools and employee business expenses totaling $10,644 in a client’s 2009 tax return. This tax return alone caused a loss to the U.S. Treasury of approximately $18,382.
The plea agreement requires Larry to make full restitution to the IRS for all of the fraudulent refunds.
U.S. District Judge Vanessa Gilmore, who accepted the guilty plea today, has set a sentencing date of Oct. 20, 2014, at which time Larry faces up to three years in prison and $250,000 fine. Larry has been permitted to remain on bond pending that hearing.
The case, investigated by IRS-CI, is being prosecuted by Assistant United States Attorney Jimmy Sledge Jr.
Source: U.S. Department of Justice, Office of the United States Attorneys
