Local Tax Preparer Sentenced to Federal Prison, Again
HOUSTON, March 27, 2017 - A local tax return preparer has been ordered to federal prison for a second time for preparing false tax returns and obstructing the IRS in the enforcement of federal income tax laws, announced Acting U.S. Attorney Abe Martinez along with D. Richard Goss, special agent in charge of Internal Revenue Service-Criminal Investigation (CI). Cedric Keith Oliphant pleaded guilty Dec. 6, 2016.
Today, U.S. District Judge Keith Ellison handed Oliphant a 36-month sentence to be immediately followed by one year of supervised release. He was further ordered to pay restitution of $400,457.
According to the factual basis in support of this plea, Oliphant was previously charged and convicted of preparing dozens of false 2006-08 client tax returns though Oliphant Tax Services in Huntsville. He was released on bond in that case under a condition that he have no involvement in the preparation of tax returns other than his own. However, Oliphant resumed tax return preparation and continued to claim the same false deductions for unsuspecting clients while awaiting sentencing in the earlier case.
As part of his continuation of the scheme, Oliphant changed the name of his business to “Tax Services” to make it appear he had stopped preparing client tax returns and that someone else was the owner of his tax preparation business. Oliphant allegedly attributed the fees to the nominal owner of his tax office but manipulated those tax returns to make it appear the tax office had produced almost no taxable income.
Oliphant established a series of bank accounts in the names of others - including minors with custodians other than himself - so the fees could first be deposited to accounts in the names of the nominal owner of his tax office and others. He then transferred those fees through these intermediate accounts to accounts in his own name. This scheme enabled Oliphant to conceal his personal use of the fees generated by the business during the course of the prosecution on the first case according to the plea agreement.
While operating his tax preparation business under other names, Oliphant generated $2 million in fees and a total loss to the IRS of another $400,457. The losses from the false tax returns prosecuted in the earlier case exceeded $325,000.
Oliphant was sentenced to 33 months on the earlier case and was released from prison Aug. 26, 2016. He was denied bond upon his arrest in this case on Sept. 2, 2016, and remains in custody pending transfer again to a U.S. Bureau of Prisons facility to be determined in the near future.
Oliphant’s plea agreement requires that he surrender approximately $205,000 in bank accounts linked to the scheme, his personal residence and three automobiles valued at $32,600 as restitution to the IRS in both cases.
The investigation leading to these charges was conducted by IRS-CI. Assistant U.S. Attorney Jimmy Sledge Jr. has prosecuted both cases.