Seattle – A 58-year-old resident of Pacific, Washington, was sentenced today in U.S. District Court in Seattle, to a year and a day in prison for 14 counts of aiding and abetting the filing of false tax returns, announced U.S. Attorney Nick Brown. 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 in September 2021, 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. Further, on his personal tax returns, Mpouli hid over $200,000 of revenue generated from his illegal side business.
At today’s sentencing hearing U.S. District Judge John C. Coughenour ordered Mpouli to pay $31,296 in restitution, and imposed one year of supervised release following the prison term.
“Motivated purely by greed, Mr. Mpouli took advantage of the trust placed in him by his community – African immigrants and their descendants,” said U.S. Attorney Nick Brown. “His clients were particularly vulnerable to being used in this way, as they were unfamiliar with U.S. tax law. Mr. Mpouli placed his clients in harm’s way, exposing them to audit, fines and penalties, and potential criminal investigation.”
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.
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.
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.
In all, the government estimated the tax loss to be nearly $3.5 million.
“When those we trust to prepare our taxes take advantage of their clients for their own greed, everybody is harmed. We rely on our tax system to provide resources to fund critical services that we all rely on,” said Bret Kressin, IRS Criminal Investigation (IRS:CI) Special Agent in Charge, Seattle Field Office. “Mr. Mpouli knew on a personal level how critical tax revenue is to public safety, as his prior career as a government employee was funded by taxpayer dollars. However, Mr. Mpouli chose to abuse the system in spite of this for his own illicit gain. Today’s sentence is a reminder that IRS:CI takes attacks on our tax system seriously, because the safety and well-being of our communities are what is at stake.”
The case was investigated by Internal Revenue Service: Criminal Investigation. The case was prosecuted by Assistant United States Attorneys Lyndsie Schmalz and Frances Franze-Nakamura.
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