7 Tax Service Workers Indicted

The owner of a Yorba Linda tax service and six people who worked for him were indicted by a federal grand jury Wednesday on charges of preparing thousands of income tax returns that fraudulently sought more than $47 million in refunds from the U.S. government.

The indictments “resulted from an investigation by the Internal Revenue Service that went on for several years,” said Robb C. Adkins, an assistant U.S. attorney prosecuting the case. “This is a big problem that costs the government millions of dollars each year.”

Samuel Joseph DeAngelo, 58, owner of DeAngelo Tax Service, which was renamed Western Tax Service in early 2001, is scheduled for arraignment May 3 before a federal magistrate in Santa Ana on charges of conspiracy and willfully aiding or assisting in the preparation of a false federal income tax return.

DeAngelo’s attorney, Paul W. Raymond, said an indictment had been expected. “Mr. DeAngelo denies any wrongdoing and intends to contest the charges in court,” he said.

Also named in the indictment are Jeffrey Russell Wright, 29, of Anaheim; Kelly Agbonmoba David, 26, of Irvine; Alan Michael Hovey, 34, of Cathedral City; Anthony Todd Stefani, 39, of Chino Hills; Heather Lee Chaffin, 30, of Costa Mesa; and Douglas Shields, 40, of Orange.

The seven are accused of generating more than 16,000 false returns for taxpayers from 1998 to 2001 that contained fabricated or significantly inflated figures for such items as charitable gifts, business expenses and depreciation.

Prosecutors say the taxpayers were asked a series of yes/no questions on such topics as working at home and attending church. Adkins said the taxpayers -- who, in most cases, had provided few supporting documents -- were asked to sign forms allowing the returns to be filed electronically without being reviewed.

The fees charged by the firm, typically ranging from $300 to $1,700 for tax forms that took less than 30 minutes to prepare, were tied to the amount of the refund, Adkins said. “It’s fair to say that there were financial incentives for getting big returns,” he said.

If convicted, Adkins said, DeAngelo could face 19 years in prison and his associates nine years.

The U.S. attorney’s office, Adkins said, has no plans to prosecute the taxpayers involved.