One of the worst cases of Tax Fraud

[Lee B]

From Accounting Today's Tax Fraud Blotter:

 

 

Miami: Claude Arthur Verbal II, formerly of Raleigh, N.C., has been sentenced to 135 months in prison for tax fraud, health care fraud and money laundering in two separate cases.

 

Verbal was also ordered to serve three years of supervised release following his prison term, to pay restitution of $4,078,584 to the IRS and $2,382,378 to the North Carolina Department of Health and Human Services.

 

On April 9, Verbal pleaded guilty to one count of conspiracy to defraud the U.S., one count of aiding and assisting the preparation of false returns, one count of health care fraud and one count of money laundering. 

 

Verbal was the owner of Nothing But Taxes, a prep franchise with 10 branches throughout North Carolina from 2005 to at least 2012. He personally prepared false returns for clients of NBT and taught and encouraged his employees to do so as well.

 

Verbal and NBT employees frequently offered clients a dramatically larger refund if the client agreed to make a cash payment to their preparer. These payments were over and above the flat fee that NBT charged every client whether or not the return was falsified. The most common falsifications at NBT involved dependents, Schedule C businesses, tip income, EITCs and education credits. Verbal and many of his employees facilitated the purchase and sale of false dependents at NBT by purchasing the names, dates of birth and Social Security numbers of individuals to use as false dependents on other clients’ returns. 

 

In November 2010, one of Verbal’s employees informed a U.S. probation officer of the fraudulent practices at NBT. The probation officer informed Verbal of this fraud and he denied knowledge of it, then took steps to keep the practice open and distance himself from the fraud.

 

According to court documents, Verbal also owned Infinite Wellness Concepts, a Medicaid behavioral health provider contracted to provide group therapy, intensive in-home services and enhanced mental health and substance abuse services. Authorities claimed Verbal acquired at least $1 million in fraudulently obtained funds from the Medicaid program.

 

Verbal used the schemes’ take to buy luxury cars, homes and jewelry. The money-laundering charge relates to the purchase of a $52,000 diamond ring with proceeds of health care fraud.