Ex-IRS Worker Sentenced for Fraud Scheme

A former IRS worker and two Orange County tax preparers who duped delinquent taxpayers and the government out of hundreds of thousands of dollars were sentenced Wednesday to federal prison.

The ruling caps a six-year federal investigation into the tax fraud, which included secretly recorded audiotapes in which the defendants openly discussed the scam.

Former IRS agent Valerie Crawford, 41, was sentenced to three years in prison. The tax preparers, Joseph Tawil, 52, of Dana Point, and his brother Ramzi Tawil, 49, of Yorba Linda, received 37- and 21-month sentences respectively. The three were ordered to pay a total of $327,000 in restitution--the amount the government lost.

“A . . . veteran of the federal government abused her position to perpetuate an intricate scheme,” said James Aquilina, assistant U.S. attorney. “She deserved federal prosecution and a stiff prison sentence.”

Crawford was a senior revenue officer at the IRS office in Santa Ana who was responsible for negotiating payments from delinquent taxpayers. If she found a taxpayer unable to pay the full amount, she could accept a compromise offer for less, or she could wipe out the entire debt if there was no hope of collecting any money.

Prosecutors charged that the Tawils, who owned and operated Advanced Accounting Services Inc. in Brea, collected more than $90,000 from five clients between 1992 and 1997, promising to use the money in compromise settlements negotiated with the IRS. But the funds never reached the government’s coffers.

In each case, Crawford falsified IRS records to show that the debts were uncollectable, said Thom Mrozek, spokesman for the U.S. attorney’s office. In one instance, the prosecutors charged, Crawford created bogus letters from banks showing that the taxpayer was buried in debt. According to trial testimony, however, the taxpayer had just inherited nearly $130,000 from her deceased husband’s insurance policy and had given the Tawils $46,000 to be used in a compromise settlement purportedly reached with Crawford. Crawford noted in IRS files that the life insurance policy was not paid and the government would be better off halting collection efforts.

The investigation began in September 1993, when the Internal Revenue Service got a tip from Joseph Tawil’s former girlfriend.

The jury also heard segments of secretly recorded audiotapes in which the Tawils told an undercover agent that they had an IRS contact who could be bribed. Joseph Tawil’s lawyer dismissed the remarks, describing his client as a braggart given to making up stories to impress clients.

Crawford and her attorney could not be reached for comment. But she has denied fixing cases or receiving bribes. She said her relationship with the Tawils was strictly professional.

Her attorney has said Crawford is considering an appeal of the case.