November 25, 2003
The United States Attorney's Office for the Northern District of California announced that Arlanda E. Johnson pled guilty yesterday to willfully aiding and assisting in the preparation of false federal tax returns.
Mr. Johnson, 59 of Oakland, California, was indicted by a federal grand jury on March 27, 2002, and charged with 69 tax counts in violation of 26 U.S.C. § 7206(2). Under the plea agreement, Mr. Johnson pled guilty to five counts.
According to the plea agreement, Mr. Johnson admitted to aiding and assisting in the preparation of 69 different original and amended federal income tax returns for 16 clients spanning the five-year period from 1994 through 1998. While the clients provided him with accurate personal and business records, Mr. Johnson obtained fraudulent refunds or reduced the tax for each of the 69 returns by either inflating or creating false Schedules A, C, and E deductions and expenses.
One scheme involved creating business losses by reporting non-existent Schedule C income and then claiming non-deductible church-related expenses exceeding the income and resulting in the losses. In addition to the false religious-related Schedule C losses, Mr. Johnson created a false Schedule E turning a shared living arrangement into a rental property, created false businesses with false expenses, created false business expenses for legitimate businesses, inflated business expenses and charitable contributions, fabricated unreimbursed employee business expenses, and manipulated the marital filing status to put clients in a lower tax bracket.
The sentencing of Mr. Johnson is scheduled for March 1, 2004, before Judge Claudia Wilken in Oakland Federal Court. The maximum statutory penalty for each count in violation of 26 U.S.C. § 7206(2) is three years and a fine of $250,000. However, the actual sentence will be dictated by the Federal Sentencing Guidelines, which take into account a number of factors, and will be imposed in the discretion of the Court.
The prosecution is the result of a three-year investigation by agents of the Internal Revenue Service's Criminal Investigation Division. David Denier is the Assistant U.S. Attorney who prosecuted the case with the assistance of legal technician Kathy Tat.
A copy of this press release may be found on the U.S. Attorney's Office's website at www.usdoj.gov/usao/can. Related court documents and information may be found on the District Court website at www.cand.uscourts.gov or on http://pacer.cand.uscourts/gov.
All press inquiries to the U.S. Attorney's Office should be directed to Assistant U.S. Attorney Matthew J. Jacobs at (415) 436-7181.
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