TRENTON, NJ — One employee of an Essex County tax preparation business pleaded guilty and three others were arraigned in federal court for their roles in a false income tax return conspiracy that caused tax losses of more than $900,000, U.S. Attorney Craig Carpenito announced May 10 in a press release.
Rudolph Sanders, 41, of Newark, pleaded guilty May 10 before U.S. District Judge Michael A. Shipp in Trenton federal court to an information charging him with one count of conspiracy to defraud the IRS from February 2011 through March 2013.
Joseph Kenny Batts, 49, of Elkridge, Md.; Angelo K. Thompson, 38, of Reisterstown, Md.; and Tony V. Russell, 47, of Stone Mountain, Ga., were arraigned before Shipp on May 9. They are each charged by indictment with one count of conspiracy to defraud the IRS from February 2013 through February 2017. In addition, Batts is charged with five counts of aiding and assisting in the preparation of false federal income tax returns, Thompson is charged with two counts of aiding and assisting in the preparation of false federal income tax returns, and Russell is charged with one count of aiding and assisting in the preparation of false federal income tax returns.
In June 2017, Damien Askew, 39, of Union pleaded guilty to his role in the scheme from 2011 to 2015 and awaits sentencing. All five defendants have been released on bail.
According to documents filed in this case and statements made in court, from 2009 through April 2015, Batts and Askew co-owned Tax Pro’s, a tax return preparation and payroll business in Essex County where Sanders, Batts, Thompson, Russell and Askew all prepared tax returns. In order to boost their business, the defendants allegedly conspired to falsify their clients’ income tax returns for the purpose of generating refunds in amounts that their clients were not entitled to receive. For instance, Sanders, Batts, Thompson, Russell and Askew allegedly fabricated or inflated their clients’ education credits, child care deductions, charitable contributions, unreimbursed employee expenses and certain business losses.
Sanders and other members of the conspiracy also reportedly permitted Batts to use their identification numbers in order to conceal Batts’ identity as the actual tax return preparer, partly due to Batts’ prior tax fraud conviction.
After law enforcement executed a search warrant at Tax Pro’s in April 2015, Batts discontinued Tax Pro’s and opened Tax Solutions and Associates in Union, New Jersey, where Batts, Thompson, and Russell continued preparing false federal income tax returns.
By inflating the tax refunds through fraudulent means, Batts, Askew, Thompson, Russell, and Sanders reportedly caused a total tax loss to the United States of more than $900,000.
The conspiracy charge carries a maximum potential penalty of five years in prison. The aiding and assisting in the preparation of a false return charge carries a maximum potential penalty of three years in prison. Both charges carry a $250,000 fine, or twice the gross gain or loss from the offense.
Sanders’ sentencing is scheduled for Aug. 14. The charges and allegations against Batts, Thompson, and Russell are merely accusations, and they are presumed innocent unless and until proved guilty in a court of law.