Carl Riley, Jr. and Paul Emile Ntahonkiriye Sentenced – PRISON – False Income Tax Return Scheme!

Preparing false tax returns is a crime – subject to prison. The principles of PNT Tax Service have just found that out – as now all three involved have been sentenced to time in federal prison.

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From October 2004 through April 2005, Paul Emile Ntahonkiriye began operating an income tax return preparation business in Abilene, Texas, by the name of PNT Tax Service (PNT). Beginning in January 2005, Mandengu, Ntahonkiriye and Riley began preparing tax returns through PNT. For the 2005 tax filing season, PNT prepared approximately 100 income tax returns. Approximately 57 of those returns were fraudulent and claimed false income tax refunds.

In preparing the fraudulent returns, Mandengu, Ntahonkiriye, and Riley would tell their clients that in order to get a larger refund, one or two false dependents could be listed on the return as either a nephew or niece, and in some instances the wages earned were increased to increase the earned income tax credit. Using fraudulent dependents and inflated wages created a fraudulent income tax refund to which each of the co-defendants knew that the client was not entitled. Ntahonkiriye would add the names of the false dependants from a list he obtained from Burundi.

Mandengu, Riley, and Ntahonkiriye would not have the clients sign any documents and often would not furnish them with copies of the return or any documents or forms he used in the preparation and filing of theft tax return. Mandengu, Riley, and Ntahonkiriye would prepare the returns and then Ntahonkiriye would electronically file the client’s return with the Internal Revenue Service. The preparation fee for each return varied from approximately $20 to more than $900 and was electronically deposited by HSBC Taxpayer Financial Services, located at New Castle, Delaware, into Mandengu’s savings account at the First Financial Bank, in Abilene, Texas. When the refund was received, an additional fee was requested from some of the clients; often clients did not know about the first fee being deducted.

The total amount of the fraudulent income tax refunds claimed by Mandengu, Ntahonkiriye, and Riley on the false returns was $100,725.

Martin Fungai Mandegu was sentenced to 16 months in federal prison. On Friday March 14, 2008 – Carl Riley, Jr. was sentenced to 10 months in federal prison and Paul Ntahonkiriye was sentenced to 18 months. In addition the the prison sentences – all were ordered to make complete restitution of $100,725.

Rick Martinez, Special Agent in Charge of Internal Revenue Service, Criminal Investigation for the Dallas Field Office, said, “While most return preparers provide excellent service to their clients, a few unscrupulous tax preparers file false and fraudulent returns to defraud the government, the tax paying public and their own clients. Internal Revenue Service, Criminal Investigation always strives to ensure that attorneys, accountants and other tax practitioners adhere to professional standards and follow the law.”

Every choice has a consequence. As a white collar crime and business ethics speaker, I speak from first hand experience about the truth about consequences. Reality is – no one escapes the consequences of their choices. While the these three avoided the “tax man” for a time – they did not avoid the consequences. You do reap what you sow.

White Collar Crime Speaker – Chuck Gallagher – signing off…

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