founder of the national tax preparation company sentenced to prison for fraud and tax crimes | Takeover bid
An Ohio man was sentenced today to one year and one day in jail for conspiring with others to commit fraud in connection with the operation of a national tax preparation company income that he owned and managed, as well as for tax crimes.
According to court documents and evidence presented at trial, Fessum Ogbazion, of Cincinnati, collected millions of dollars in fees while fraudulently tricking clients into visiting ITS Financial LLC, the national franchisor of Instant Tax Service (ITS), a tax preparation company he started in 2004. ITS advertisements offered tax refund anticipation loans through an independent third-party lender, despite the fact that ITS did not had no such lender to finance the promised loans. Ogbazion used the bogus advertising campaigns to trick clients into visiting ITS sites for a loan, then used the loan applications to prepare and file tax returns, often without the client’s permission. Between 2006 and 2011, ITS collected more than $ 70 million in fees.
Ogbazion also failed to pay about $ 1.3 million in payroll taxes owed by ITS and another company during four tax quarters in 2009 and 2010. Ogbazion escaped attempts by the IRS to collect its unpaid payroll taxes by directing company income to nominee accounts, placing assets on behalf of nominee entities and making false statements to an IRS revenue officer who attempted to collect the tax debt of STIs.
Ogbazion was convicted by a federal jury on June 6, 2017, of tax evasion, willful failure to withhold and pay employment taxes, wire fraud, conspiracy to commit wire fraud and bank fraud. After the trial, the court dismissed five counts of wire fraud, but left the conviction for conspiracy to commit wire fraud and other convictions untouched.
In addition to the jail term, US District Judge Timothy S. Black ordered Ogbazion to serve three years of supervised release and pay approximately $ 933,708 in restitution to the United States.
Acting Assistant Deputy Attorney General Stuart M. Goldberg of the Justice Department’s Taxation Division made the announcement.
The IRS-Criminal Investigation investigated the case.
Senior litigation attorney Corey Smith and District Attorney Mark McDonald of the Department of Justice Tax Division and Paralegal Laura Strubbe of the United States Attorney’s Office for the Southern District of Ohio continued the case.