Preyed on the financially disadvantaged and filed over 2300 fraudulent returns
INDIANAPOLIS - United States Attorney Josh J. Minkler announced today that a tax preparation business owner was sentenced in federal court for his role in directing the filing over 2300 false tax returns. David R. Franklin, 44, previously pleaded guilty to three counts of making and filing false tax reports and was sentenced to 48 months (four years) imprisonment by U.S. District Judge Tanya Walton Pratt.
“Mr. Franklin did not steal from an agency in Washington, he stole from his fellow citizen," said Minkler. “Judge Pratt’s sentence demonstrates the seriousness of his offense."
Franklin owned and operated 27 Instant Tax Service (ITS) tax preparation stores in the Indianapolis area employing and training over 50 preparers. 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 that revealed 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.
Gabriel Grchan, Special Agent in Charge of IRS Criminal Investigation, said, “Dishonest tax return preparers should take notice that your activities do not go unnoticed. IRS Criminal Investigation is focused on protecting taxpayers by exposing unscrupulous tax return preparers through criminal prosecution and today’s sentencing is another example of these efforts."
Assistant United States Attorney James M. Warden, who prosecuted this case for the government said, Franklin must make restitution of $1,501,000 and serve three years of supervised release after his sentence.
Source: U.S. Department of Justice, Office of the United States Attorneys
