DOJ Announces Fraud Charges Against Return Preparer

Tax Preparer Arrested For Stealing From His Clients And Filing False Tax Returns

Wednesday, May 12, 2021

Audrey Strauss, the United States Attorney for the Southern District of New York, Jonathan D. Larsen, Special Agent in Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), and Amanda Hiller, Acting Commissioner of the New York State Department of Taxation and Finance (“DTF”), announced today the unsealing of a Complaint charging CARLOS DE LA TORRE with wire fraud, mail fraud, and filing false income tax returns in connection with a years-long scheme to steal from the clients of his tax preparation business and defraud the Internal Revenue Service (“IRS”) and New York State Department of Taxation and Finance (“NYSDTF”). DE LA TORRE was arrested today and will be presented in Manhattan federal court before United States Magistrate Judge Sarah Netburn.

U.S. Attorney Audrey Strauss said: “As alleged, Carlos De La Torre defrauded the clients of his tax preparation business by converting to his own use money the clients had been told they owed the IRS and New York State. Further, De La Torre allegedly defrauded the IRS and the State by seeking refunds for overpayments of his taxes that were actually the funds he stole from his clients, and by failing to report those stolen funds as income. Now Carlos De La Torre is facing multiple federal felony charges.”

IRS-CI Special Agent in Charge Jonathan D. Larsen said: “With the tax filing deadline only days away, the arrest of Mr. De La Torre is a timely reminder to taxpayers to do their due diligence when selecting a tax preparer. Not only is the defendant accused of violating the trust placed in him by his clients, he also allegedly profited nearly half a million dollars in this years-long scam. IRS-CI special agents are working tirelessly to protect taxpayers from fraud and investigate potential unscrupulous tax return preparers.”

Acting DTF Commissioner Amanda Hiller said: “Tax preparers are expected to operate with honesty and integrity. Those who instead defraud their clients — and New York State — for personal gain must be held accountable. We'll continue to work with all levels of law enforcement, including the U.S. Attorney's Office for the Southern District of New York, to bring dishonest tax preparers to justice.”

As alleged in the Complaint unsealed today in Manhattan federal court¹:

DE LA TORRE is a tax preparer and the sole proprietor of a bookkeeping and tax preparation business in New York, New York. From at least in or about 2014 through at least in or about 2020, DE LA TORRE represented certain small businesses based in New York City and their owners (the “Victims”) in connection with the preparation and filing of their personal and business federal and state tax returns. During that time period, DE LA TORRE told the Victims how much they allegedly owed in state and federal personal and business taxes, and the Victims gave DE LA TORRE checks in those amounts.

Instead of submitting the Victims' checks as payments to be applied toward the Victims' federal and state tax liabilities, DE LA TORRE fraudulently altered the checks and mailed them to the IRS and the NYSDTF as estimated tax payments to be credited against his own personal tax liabilities. Those payments greatly exceeded DE LA TORRE's own tax liabilities each year. At the end of each tax period, DE LA TORRE fraudulently sought and received refunds from the IRS and the NYSDTF for the total amount of the altered checks he submitted to each agency, less any amount DE LA TORRE actually owed in taxes. Refunds from the IRS and the NYSDTF were wired by the U.S. Treasury and New York State, respectively, directly into DE LA TORRE's personal bank account. In total, DE LA TORRE stole at least approximately $455,000 from the Victims through this scheme.

DE LA TORRE also filed false tax returns with the IRS in connection with this scheme. He failed to report the money he stole from the Victims on his federal tax returns. Had DE LA TORRE reported that income, as he was required to do, his total federal tax liability each year would have been much greater than it was, and he would not have been entitled to the refunds that he claimed. As a result, DE LA TORRE defrauded the IRS of at least approximately $48,000 in tax liabilities (including interest).

* * *

DE LA TORRE, 79, of Little Neck, New York, is charged with one count of mail fraud, in violation of Title 18, United States Code, Section 1341, and one count of wire fraud, in violation of Title 18, United States Code, Section 1343, each of which carries a maximum sentence of 20 years in prison, and five counts of subscribing to false individual tax returns, in violation of Title 26, United States Code, Section 7206(1), each of which carries a maximum sentence of three years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant would be determined by the judge.

Ms. Strauss praised the outstanding investigative work of the IRS-CI and NYSDTF.

The prosecution of this case is being handled by the Office's General Crimes Unit. Assistant United States Attorney Sarah L. Kushner is in charge of the prosecution.

The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

Attachment(s):
Download carlos_de_la_torre_complaint_21_mag_5030.pdf