Preyed on the financially disadvantaged and filed over 2300 fraudulent returns
INDIANAPOLIS - United States Attorney Josh J. Minkler announced today that David R. Franklin, 43, Fishers, has pled guilty to three counts of procuring the preparation of false federal income tax returns before U.S. District Judge Tanya Walton Pratt.
“When someone cheats on their tax returns, let’s call it what it is-stealing," said Minkler. “Federal budgets are not bottomless accounts and when individuals steal from the government, the difference must be made up by honest tax-paying citizens."
Franklin owned and operated more than 20 Instant Tax Service (ITS) tax preparation stores in Indianapolis. On August 8, 2013, United States District Judge Sarah Evans Barker granted a permanent civil injunction against Franklin and ITS. This action ordered Franklin and ITS from directly or indirectly preparing, filing or assisting in the preparation or filing of any federal tax return.
The Internal Revenue Service-Criminal Investigation initiated an investigation of Franklin. The investigation revealed that Franklin trained and directed his employee return preparers regarding the preparation of federal income tax returns. Specifically, Franklin counseled and advised his employees to prepare false and fraudulent federal income tax returns for multiple clients from 2010 through 2012.
As a specific means of generating false returns, Franklin directed his employees to prepare Form 1040 Schedule C forms reporting inflated business income or losses, which then resulted in unauthorized earned income credits and refunds for taxpayer clients of ITS.
As a result of these efforts by Franklin, more than 2,300 false federal income tax returns were filed by ITS between 2010 and 2012, which resulted in a loss to the Internal Revenue Service and the American public of $1,501,000.
As part of Franklin’s plea agreement, he will be ordered by the court to pay full restitution for the criminal tax loss of $1,501,000.
“With tax season upon us, I want to assure the American taxpayers that IRS Criminal Investigation is focused on protecting revenue by investigating abusive tax return preparers," said IRS Criminal Investigation Special Agent in Charge James D. Robnett. “While most return preparers are honest and provide excellent service, a few unscrupulous tax preparers file false and fraudulent returns to defraud their clients and the United States government. Today we are putting those dishonest tax preparers on notice; we are watching your activities more closely than ever before. Today’s guilty plea should send a loud message to those dishonest return preparers thinking of engaging in criminal activity."
According to Assistant United States Attorney James M. Warden, who is prosecuting the case for the government, each offense is punishable by a maximum sentence of three (3) years’ imprisonment, a $250,000 fine, and one (1) year supervised release following any term of imprisonment. Warden added that the sentence imposed on each count may be ordered to be served consecutively to the other counts. Sentencing date is scheduled for Oct. 14, 2016.
Source: U.S. Department of Justice, Office of the United States Attorneys
