Monday, March 30, 2009

Tax Fraud: Los Angeles Preparer Sentenced To Probation

On March 26, 2009, Roland G. Uy, a Woodland Hills, California tax preparer who pleaded no contest last November to two counts of aiding others in filing false tax returns and three other felony counts was sentenced to a four-year suspended state prison term and five years of probation, during which time he must pay $20,000 each year in restitution to the State of California Franchise Tax Board (FTB). The case was prosecuted by the Los Angeles County District Attorney’s Office, the Fraud Interdiction Program.

Under the plea agreement Uy was ordered to pay a total of $159,000 in restitution, and had just over $59,000 by the time of sentencing. If Uy fails to pay the full amount of restitution it could result in prison time for him. According to the District Attorney's Office, Uy filed nearly 1,300 false tax returns on behalf of taxpayers. The FTB will seek civil reimbursements and penalties against clients who participated.

Attorney Commentary: This case shows the important of restitution in fraud cases. Payment of restitution can make the difference between prison time and probation. It often can make the difference between a felony and a misdemeanor. In this case, where the loss was over $150,000, imposition of probation is a good result if the evidence demonstrated his involvement in intentionally preparing false tax returns beyond a reasonable doubt. The term "state prison suspended" means that if Uy violates probation (by not paying restitution when he has the means to do so) or by committing another offense or not complying with the other terms of probation -- his sentence will be 4 years in state prison. This is a lot hanging over his head and gives him great incentive to comply with probation.

Any questions or comments should be directed to: Tracy Green is a principal at Green and Associates in Los Angeles, California. They focus their practice on the representation of licensed professionals and businesses in civil, business, administrative and criminal proceedings.


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