May 18, 2004
The United States Attorney's Office for the Northern District of California announced that Arlanda E. Johnson was sentenced yesterday to five months in prison for assisting in the preparation of false tax returns. The sentence was handed down by U.S. District Court Judge Claudia Wilken in Oakland following Mr. Johnson's November 24, 2003 guilty plea to five violations of 26 U.S.C. § 7206(2).
Mr. Johnson, 60, of Oakland, California, was indicted by a federal grand jury on March 27, 2002. He was charged with 69 counts of willfully aiding and assisting in the preparation of false federal tax returns, in violation of 26 U.S.C. § 7206(2) .
According to the plea agreement, Mr. Johnson operated a tax preparation business and held himself out as a tax professional who previously worked for the Internal Revenue Service. He admitted assisting in the preparation of 69 different original and amended federal income tax returns, for 16 different clients, between 1994 and 1998. Mr. Johnson admitted that these returns were materially false as charged in the indictment. According to the plea agreement, although Mr. Johnson's clients provided him with accurate personal and business records, he obtained fraudulent refunds or reduced the tax due for each of the 69 returns, either by inflating or creating false Schedules A, C and E deductions and expenses.
The schemes to which he admitted included: (1) creating a false Schedule E, turning a shared living situation into rental property; (2) creating false businesses and false business expenses; (3) inflating charitable contributions; (4) fabricating unreimbursed employee business expenses; (5) claiming college tuition as a deductible job-related expense; and (6) manipulating marital filing status to achieve a lower tax bracket.
Judge Wilken sentenced Mr. Johnson to five months in federal prison followed by five months community confinement, ordered him to pay restitution of $160.00, and imposed a one year term of supervised release. The defendant was ordered to begin serving the sentence on August 13, 2004.
The prosecution was the result of a three year investigation by Special Agents of the Internal Revenue Service Criminal Investigation Division. David L. Denier is the Assistant U.S. Attorney who prosecuted the case with the assistance of 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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