GLOVERSVILLE - Federal prosecutors say three employees of a city financial accounting services firm, including its owner, helped prepare false tax returns.
A federal grand jury last month indicted Carmen R. Gentile Jr., owner of Complete Financial Accounting Services of 17 Industrial Parkway, and his employees Angela J. Witzke and Michele L. Lennon each on 11 counts, all felonies.
The three each were charged with one count of conspiracy and 10 counts of aiding and assisting in the preparation of false tax returns, according to the indictment dated June 27 filed in U.S. District Court in Albany.
The tax years of the filed forms are for income earned and deductions claimed for 2005, 2006 and 2007.
The indictment says tax schedules "were false and fraudulent in that they claimed certain itemized deductions and/or business income, expenses and/or losses that were fictitious and/or fraudulently inflated, including false charitable contributions, job-related income, expenses, losses and other miscellaneous deductions. The falsification on their clients' tax returns had the effect of reducing their clients' taxable income, resulting in IRS refunds being issued to said clients."
The indictment lists cases of fraudulent tax preparation and refers to clients by their initials.
In one incident, the indictment says, "On or about March 31, 2006, Carmen R. Gentile Jr. caused to be filed with the IRS a Form 1040 for the tax year 2005, which did not claim income generated from the sale of property in the name of J.K."
In another incident, the indictment states, "On or before March 31, 2006, Angela J. Witzke counseled J.K. on the potential tax liability for claiming income generated from the sale of property and assisted Carmen R. Gentile Jr. in the preparation of the IRS Form 1040 for the tax year 2005, which did not claim income generated from the sale of property in the name of client J.K."
The initials of clients P.C. and D.C. for 2007 and K.A. and K.A. for 2005, 2006 and 2007 also are listed, along with D.B. for 2005 and 2006 and D.B. and A.M. for 2007.
The amounts claimed on behalf of the clients range from $20,942 in job expenses and $4,042 for gifts to charity for J.K. in tax year 2005, to a $3,654 car expense for clients K.A. and K.A. for tax year 2006, to a $11,132 business expense filed for clients D.B. and A.M. in tax year 2007.
The indictment lists March 7, 2006, through "at least April 30, 2008," as the time span of the conspiracy.
While Gentile, Witzke and Lennon are named, the indictment notes the three defendants "and others known and unknown, unlawfully, willfully, and knowingly did combine, conspire, confederate and agree together and with each other to defraud the United States and ... the IRS of the United States Department of the Treasury, and to commit offenses against the United States ... violations of Title 26, United States Code, Section 7206(2)."
The indictment says the false tax forms filed were separate and additional tax documentation, Schedules A and C. The schedules allow a tax filer to list itemized deductions for business expenses, income profit or losses from a business and donations to charity. The deductions can reduce the amount of tax a filer may have to pay to the federal government.
Assistant U.S. Attorney Daniel Hanlon is prosecuting the case. He said he could not talk about the specifics of the charges against the three defendants because the case is open.
Hanlon said Jersey City, N. J., lawyer Vincent L. Verdiramo Sr. is representing Gentile. Hanlon said he has not received word yet of any legal representation for Witzke or Lennon.
Verdiramo said he had "no comment" regarding the charges against Gentile.
Neither Gentile, Witzke nor Lennon could be reached by telephone or in a visit Monday afternoon to the accounting firm's offices.
Tim Shanahan, public information officer for the IRS, also would not speak specifically about the case.
If convicted, the three defendants could face a maximum of five years in prison on each count and a fine of no more than $250,000 on each count, Shanahan said.
Over the last several years, the IRS has implemented systems to red-flag a questionable deduction form.
Since then, criminal investigations into false tax forms have increased, Shanahan said. People should be careful when choosing a tax preparer, he said.
"Be as careful as when you choose a doctor or a lawyer," Shanahan said. "You are sharing a great deal of financial information with this person."