Friday, May 26, 2006

Tax Preparer Gets Two Years in Mortgage Fraud

Holly R. Coleman, Mayfield Heights, Ohio, was sentenced to 24 months imprisonment, followed by three years of supervised release based on her guilty pleas to a three-count information charging her with aiding and assisting the preparation of false income tax returns for clients of her former tax business, making false claims for income tax refunds in her own name, and mail fraud involving a fraudulent mortgage loan application. Coleman was ordered to pay restitution of $3,896 to the Internal Revenue Service and $17,453.89 to National City Home Loan Services, Inc. Coleman was ordered to self-report to prison and remains on bond.

Coleman pleaded guilty to the charges on February 21, 2006, pursuant to a written plea agreement, in which she admitted to the criminal conduct described below. According to the plea agreement, during times relevant to the charges, Coleman was self-employed as an accountant and tax return preparer, doing business as The Coleman Company and/or Tax Specialists.

As charged in Count 1, from approximately January 1, 2001, through April 15, 2002, Coleman prepared 56 federal income tax returns for 41 tax clients, containing false claims for tax refunds based on falsely claimed income tax credits and, in some instances, false deductions. On each charged return, Coleman fabricated a false claim for an education tax credit based on purported educational expenses which the client had not incurred. She also placed other false credits or deductions on certain of the returns. In aggregate, the returns contained false tax credits totaling $77,149 and false deductions totaling $21,532.

As charged in Count 2, Coleman made false claims for tax refunds by filing her own personal income tax returns for the years 2000 and 2001 which contained fictitious W-2 forms reporting fictitious wages and income tax withholdings on which she based the refund claims.

As charged in Count 3, Coleman induced two other persons (referred to as “Relative” and “Friend”), to act as nominees on her behalf to purchase and obtain mortgage financing for a property in South Euclid, Ohio, where Coleman intended to reside as her personal residence. Coleman induced Relative and Friend to prepare and submit a joint loan application to First Franklin Financial Corporation (now National City Home Loan Services, Inc.), knowing that the application documents contained false representations that Relative and Friend would occupy the premises as their principal residence, and that Friend had monthly income of approximately $801 from “Tax Specialists & The Coleman Co.” Coleman prepared and provided false and fictitious documents which were presented to First Franklin as part of the loan application, including a fictitious W-2 form and fictitious letters from the applicants’ purported landlords.

mortgage fraud

1. Thanks for your blog. I plan on having your insight available to my readers. I saw as mortgage company owner that a few will take chances, just to have a home or make a commission. This posting is an example I had to watch for closely.

   Posted by Larry Cragun  on  06/01  at  10:48 AM