Chat with an FTB Representative

Tax News
Criminal Corner

Fake CPA, Partner Arrested for Bogus Investment Scheme

September 2009 -The owner of a Glendale tax preparation business and his colleague were arrested on multiple felony charges including elder financial abuse, grand theft, state income tax evasion, and state income tax fraud related to their roles in a bogus securities investment scheme, we announced on August 5, 2009.

Donald R. Ford, of Glendale, and Gregory A. Edwards, of Culver City, were remanded into custody after their arraignment Friday. Ford allegedly persuaded clients, whose trust he had gained from his tax preparation business, to invest in a phony investment scheme. Ford, who posed as a certified public accountant and Edwards allegedly, scammed investors by promising them high rates of return on investments. Instead, Ford and Edwards used the money for their own financial gain.

Ford earned more than $1.3 million in income from the unlawful scheme and Edwards earned more than $961,000 for his role in the scam. Ford allegedly failed to report this income on his 2002 and 2006 state income tax returns and owes the state more than $231,000 in unpaid tax, penalties, and interest. Edwards allegedly failed to report his income on his 2006 state income tax return and owes the state more than $81,000 in unpaid tax. All income is taxable including income from illegal sources.

Ford and Edwards were both booked into the Los Angeles County Jail and are still in custody. Their bail is set at $100,000 each. Their next court appearance has not been set.

The filing of false tax returns and the failure to file tax returns is part of the annual $6.5 billion tax gap facing California. The tax gap is defined as the difference between taxes that are owed and what is paid.

CPAs are licensed by the state. The public can check on the status of a CPA with the California Board of Accountancy atcba.ca.gov or by calling 916.263.3680. The IRS and FTB have recently issued a brochure, FTB Publication 982, How to Select an Income Tax Return Preparer where taxpayers can learn more about choosing a tax professional.

This is a joint investigation between Department of Justice (DOJ) and us. DOJ Deputy Attorney General Edward Skelly is prosecuting this case.

 

Back to September 2009 Tax News