Most of us have little desire to mess with the IRS. Filling out your annual tax form honestly and completely is the best way to keep the agency from poking around in your business.
But some folks just can’t help trying to pull the wool over Uncle Sam’s eyes. And when they get caught, they often pay a heavy price.
Recently, the IRS released a list of the agency’s “most prominent and high-profile investigations” that ended with federal prison sentences during 2022.
Following are some examples of people who tried to cut corners on taxes or commit similar fraud, and ended up paying a heavy price for doing so.
1. Lawyer who stole from his own clients
Name: Michael Avenatti of Newport Beach, California
Sentenced on: Dec. 5, 2022
Sentenced to: 168 months (14 years) in federal prison. The court also ordered Avenatti to pay $10,810,709 in restitution to four clients and the IRS.
Pleaded guilty to:
- Four counts of wire fraud (in association with stealing millions of dollars from his clients, including a paraplegic)
- Obstructing the IRS (which was trying to collect more than $3 million in unpaid payroll taxes from a coffee business owned by Avenatti)
2. Florida man who ran an $80 million Ponzi scheme
Name: Michael J. DaCorta of Sarasota, Florida
Sentenced on: Oct. 21, 2022
Sentenced to: 23 years in federal prison. The court also ordered DaCorta to forfeit $2,817,876.16 of the proceeds of his criminal conduct.
Convicted of:
- Conspiracy to commit wire fraud and mail fraud
- Money laundering
- Filing a false income tax return
The government says DaCorta and co-conspirators duped at least 700 people into investing in an investment company named Oasis International Group Ltd., which turned out to be a Ponzi scheme — a type of fraud that involves paying existing investors with money collected from new investors. The result was losses of more than $80 million for the victims.
3. Solar company exec who ran a billion-dollar Ponzi scheme
Name: Paulette Carpoff of Martinez, California
Sentenced on: June 28, 2022
Sentenced to: 11 years and three months in federal prison
Pleaded guilty to:
- Conspiracy to commit an offense against the United States
- Money laundering
The government says Carpoff — who was chief operating officer of a business called DC Solar — played a key role in “the biggest criminal fraud scheme in the history of the Eastern District of California,” which is one of the largest court districts in the country. It is estimated that the scam robbed investors of approximately $1 billion.
The rest of the top 10
Here are the rest of the top 10 cases on the IRS’ 2022 list:
- California man who scammed cannabis vaping business investors
- Two promoters of nationwide tax scheme
- TV personalities who committed fraud and tax evasion
- Serial tax fraudster
- Tax cheat who also committed multimillion-dollar investment fraud
- Las Vegas tax preparer who engaged in multiple fraud schemes
- D.C. man who tried to steal millions in COVID-19 funds