Tax preparer convicted of multiple counts of tax fraud for filing false tax returns

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IRS,Tax Check,Filing Taxes,Tax Deadline
IRS,Tax Check,Filing Taxes,Tax Deadline

Seattle – A 58-year-old resident of Pacific, Washington, was convicted late yesterday in U.S. District Court in Seattle, of 14 counts of aiding and abetting the filing of false tax returns, announced Acting U.S. Attorney Tessa M. Gorman.  Jean Mpouli worked for 25 years as an aviation inspector for the Federal Aviation Administration (FAA), while on the side he ran a tax preparation business with hundreds of clients, offering his services primarily to African immigrants.  At the 3-day trial prosecutors showed how Mpouli falsely increased deductions for unreimbursed business expenses and educational expenses to boost his clients’ tax refunds.  Mpouli took a percentage of the refund as his fee, so the higher the refund, the larger the fee.  On his personal tax returns, Mpouli hid over $200,000 of revenue generated from his illegal side business.  The jury deliberated less than two hours before returning the guilty verdicts.

Mpouli faces up to 3 years in prison per count of conviction when sentenced by U.S. District Judge John C. Coughenour on January 11, 2022.

“Even as he was employed by the federal government, this defendant sought to cheat the government out of tax revenue,” said Acting U.S. Attorney Gorman. “He drew his clientele from his community, which consisted of hard-working immigrants from Africa and their children.   He filed the false returns largely without the knowledge of the immigrants who sought his help – leaving them to deal with the IRS when the false entries were uncovered.”

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According to records filed in the case and testimony at trial, in late 2016 an analyst with the IRS noted that an unusually large number of returns prepared by Mpouli claimed deductions for unreimbursed business expenses.  In 2017, the IRS Criminal Investigation Division sent an undercover officer into the business to get an up-close look at how Mpouli prepared tax returns.  Using the W-2 information the undercover officer supplied, Mpouli rightly determined the agent owed approximately $800 in taxes.  However, Mpouli then offered to enter in approximately $34,000 in fraudulent expenses in order to boost the undercover officer’s refund to more than $5,600.  Mpouli explained that the undercover officer should consider the refund as a “loan” in the event the officer was audited by the IRS.  Mpouli then accepted $250 in cash as his fee for preparing the fraudulent return.

When agents executed court authorized search warrants on the business in September 2017, they found more than 1,200 personal tax returns on Mpouli’s computers.  Hundreds of the tax returns show suspiciously high amounts of unreimbursed business expenses and education expenses.  In one example, Mpouli claimed a client had driven more than 33,000 miles for business in one year.  However, the client did not own a vehicle, did not have a driver’s license, and had never driven a vehicle in the U.S.

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When investigators contacted a random sampling of the clients who had used Mpouli’s services, they said they were not aware of the extent of the deductions he had claimed on their behalf.  Many did not own vehicles even though Mpouli listed unreimbursed car expenses.  Others never attended the educational institution listed on the returns.  In some instances, he claimed children were attending the secondary education institution, even though the children were actually enrolled in daycare or elementary school.  The clients said Mpouli did not discuss the returns with them before filing, and when they were notified that they were being audited, he refused to assist them.

“Mpouli brazenly ripped off taxpayers while simultaneously collecting a paycheck from the tax-paying public. As a tax return preparer, he had an obligation to his clients to prepare accurate tax returns that comply with the law. Instead, he took advantage of their trust and pocketed a percentage of each fraudulent refund,” said IRS Criminal Investigation’s Special Agent in Charge Bret Kressin. “Return preparer fraud is a top priority for IRS Criminal Investigation and special agents will continue to investigate tax preparers who defraud the government, their clients, and the tax-paying public.”

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According to financial records, during the time period of the fraud, Mpouli was sending more than $300,000 to his native Cameroon to pay for the construction of an apartment building.

The case was investigated by Internal Revenue Service: Criminal Investigation.  The case is being prosecuted by Assistant United States Attorneys Lyndsie Schmalz and Frances Franze-Nakamura.

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