A federal court in Miami today issued an order holding Gerald Vito, James Eleby and Kwame Thomas in contempt for violating a permanent injunction that prohibited Vito and Eleby from preparing, filing or assisting in the preparation or filing of federal tax returns for others.
According to the complaint filed against Vito and Eleby in March 2021, the defendants prepared tax returns that significantly understated their customers’ tax liabilities by claiming deductions for fabricated or inflated charitable deductions, medical expenses, and employee business expenses. The complaint further alleged that the defendants significantly understated their customers’ tax liabilities by reporting false or inflated business losses. On Dec. 27, 2021, the court issued a default judgment of permanent injunction that barred Gerald Vito and James Eleby from preparing tax returns for others.
Following a hearing in September, the court found that the United States demonstrated by clear and convincing evidence that Vito and Eleby violated the permanent injunction by continuing to prepare tax returns for others. The court further found that Thomas, who was not a defendant in the original complaint, violated the injunction by working alongside Eleby to prepare returns in violation of the injunction.
For these violations, the court held Vito, Eleby and Thomas in civil contempt and ordered that they disgorge, in the aggregate, $988,789.56 in fees they earned while violating the injunction. Vito and Eleby were further ordered to disclose to the government the names of all taxpayers for whom they prepared returns after Dec. 27, 2021, notify those taxpayers of the injunction against them, vacate the premises at which they prepare returns and file an affidavit of compliance with these terms.
Deputy Assistant Attorney General David A. Hubbert of the Justice Department’s Tax Division made the announcement.
Taxpayers seeking a return preparer should remain vigilant against unscrupulous tax preparers. The IRS has information on its website for choosing a tax return preparer and has launched a free directory of federal tax preparers. The IRS also offers 10 tips to avoid tax season fraud and ways to safeguard their personal information.
In the past decade, the Justice Department’s Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
This crime news article "Court Finds Three Miami-Area Tax Return Preparers in Contempt and Orders Disgorgement of Ill-Gotten Fees as a Sanction" was originally found on https://www.justice.gov/usao/pressreleases