5 Tax Preparers in Southland Indicted Along With 2 Clients

Five Los Angeles-area tax preparers and two clients were indicted by a federal grand jury Wednesday on charges of filing fraudulent tax returns in what is believed to be the largest single issuance of fraud charges against preparers and clients locally.

The multiple felony charges are part of a Internal Revenue Service crackdown in Southern California against preparers who create flagrantly inflated deductions to generate illegal tax refunds for clients, a practice that costs the government millions of dollars in revenue.

IRS officials say these unscrupulous preparers are a growing problem in the Los Angeles area, often preying on recent immigrants or minorities who are less sophisticated about tax laws and eager for fat refunds. All of the cases generally involve returns filed between 1980 and 1984 in which the defendants allegedly created bogus deductions by such tactics as inflating exemptions or child-care credits or creating incorrect filing statuses, said George B. Newhouse Jr., the assistant U.S. attorney coordinating the cases.

One defendant also is alleged to have impersonated an IRS employee.

“People generally would come in with their W-2s and, lo and behold, all kinds of deductions would appear,” Newhouse said of the typical pattern of the cases. In one case, deductions were so inflated that clients paid no taxes at all, Newhouse said.

IRS officials could not estimate how much in taxes is owed for the cases involved in the indictments, but the amount of inflated deductions totaled about $750,000, according to IRS special agent Alphonse V. Ristuccia.

Two defendants who could be reached late Wednesday contended that they were innocent of charges, and an attorney for one claimed that prosecutors were “grandstanding” by charging his client in the middle of the tax-filing season to create a “chilling effect” on preparers and taxpayers.

Charged in the indictments were Rene Chacon of Van Nuys; Alberto F. Silos and his wife, Ella E. Silos, both of Thousand Oaks; Gladys L. Gentry of Los Angeles; Robert C. White and his wife, Carolyn R. White, both of Hawthorne, and Jimmie L. Copeland Jr. of Los Angeles.

No Recollection

Chacon, 56, a former IRS employee, was charged with claiming large deductions for real estate that was not actually owned by his clients, Alberto Silos, 45, and Ella Silos, 43. The couple was charged with signing false tax returns.

Chacon, reached at his Van Nuys home, said he no longer prepares tax returns and did not recall doing anything improper. He declined to comment further until seeing the actual charges. The Siloses could not be reached for comment.

The indictments against the Siloses were unusual in that criminal charges are rarely filed against individual taxpayers in such cases. But these individuals were “intimately involved” in the scheme to create bogus deductions, IRS agent Ristuccia said.

Gentry, 62, was charged with preparing false income tax returns for numerous clients by inflating exemptions for dependents and child-care expenses. She also was charged with impersonating an IRS employee and, in one case, handling all inquiries from the IRS in connection with a return to keep the client from knowing what the agency was questioning.

Gentry could not be reached for comment.

Robert White, 49, and Carolyn White, 40, who worked as a team, were charged with preparing false returns that inflated exemptions and created false filing statuses. They allegedly overstated deductions to such an extent as to get all withholding back for some clients, who thus didn’t pay any tax at all, Newhouse said. They also allegedly did not provide some clients with copies of their returns, did not sign their names to some returns and forged clients’ names on certain returns, Newhouse said.

The Whites could not be reached for comment.

Denies Wrongdoing

Copeland, 48, was charged with filing false returns by claiming non-existent dependents and creating other false deductions for clients. He also is alleged to have provided fictitious documents to a client to substantiate bogus deductions.

Copeland, who is still in the tax preparation business, denied any wrongdoing. His attorney, Samuel Tolbert of Beverly Hills, said Copeland was investigated by the IRS four years ago, but nothing came out of the probe until Wednesday’s indictments.

“Waiting such a long time without any contact (puts my client) in a very difficult situation,” Tolbert said. He said that Robert C. Bonner, the U.S. attorney in Los Angeles who brought the indictments, was “grandstanding” in the middle of the tax-filing season.

“He wants to grab some headlines to send a message to some preparers,” Tolbert said. “This is supposed to put fear in people who might be doing something wrong.”

The defendants, if convicted, face up to three years in prison and a fine of as much as $100,000 for each false return, along with the costs of prosecution, Bonner’s office said. All of the defendants named in Wednesday’s indictments will be arraigned March 28, Newhouse said.