Score:   1
Docket Number:   CD-CA  2:19-cr-00425
Case Name:   USA v. Reed II
  Press Releases:
          LOS ANGELES – A Riverside County tax preparer was sentenced today to 41 months in federal prison for defrauding the IRS out of more than $2.1 million by submitting phony tax returns, including ones that maximized fraudulent refunds through child tax credits and bogus businesses for hundreds of his clients.

          Dennis L. Reed II, 31, of Hemet, was sentenced by United States District Judge Otis D. Wright II, who also ordered Reed to pay $2,158,337 in restitution to the IRS. Reed pleaded guilty on September 3 to two counts of aiding and assisting in the preparation of false income tax returns.

          Between 2014 and 2019, Reed prepared hundreds of federal and state income tax returns containing false claims designed to generate or increase fraudulent tax refunds. For example, the fraudulent tax returns falsely claimed that the taxpayers had dependents, operated a sole proprietorship, or were entitled to receive credits for certain educational expenses.

          As part of the tax fraud, Reed prepared at least 384 returns that falsely stated that the client had earned income from Schedule C sole proprietorships, which are tax forms used by the self-employed to report business profits or losses. Reed created false Schedule C businesses such as hairstylist or barber for these clients. In reality, Reed knew his clients did not work at all during the year, had not earned income, and were not required to file an income tax return.

          On at least 79 tax returns, Reed admitted he created phantom business income or losses and claimed false dependents on clients’ tax returns in order to generate tax refunds to which the clients weren’t entitled. On at least 114 tax returns, Reed falsely claimed that the clients had educational expenses that resulted in refunds to which they were not entitled.

          Though Reed prepared federal income tax returns for clients, he did not sign their returns to identify himself to the IRS as the returns’ preparer, but rather stated on the tax returns that they were “self-prepared.” Reed admitted that he charged clients between $350 and $1,350 to prepare and file income tax returns.

          The false tax returns Reed prepared resulted in a loss of $2,158,337 to the IRS.

          “The victim of [Reed’s] offense is not simply a faceless bureaucracy, but all the honest and hardworking American citizens and residents who go to work each day and pay their fair share of taxes as the law requires of them,” prosecutors wrote in their sentencing memorandum.

          IRS-Criminal Investigation investigated this matter.

          This case was prosecuted by Assistant United States Attorney Valerie L. Makarewicz of the Major Frauds Section.

          LOS ANGELES – An Inland Empire income tax return preparer pleaded guilty today to federal criminal charges for defrauding the Internal Revenue Service out of more than $2.1 million by submitting false tax returns on his clients’ behalf, including obtaining child tax credits for childless clients.

          Dennis L. Reed II, 31, of Hemet, pleaded guilty to two counts of aiding and assisting in the preparation of false income tax returns. United States District Judge Otis D. Wright II scheduled a December 2 sentencing hearing, at which time Reed will face a statutory maximum sentence of six years in federal prison.

          Reed admitted in his plea agreement that, from 2014 through 2019, he prepared hundreds of federal and state income tax returns containing false claims designed to generate or increase fraudulent tax refunds. The fraudulent tax returns falsely claimed, for example, that the taxpayers had dependents, operated a sole proprietorship, or were entitled to receive credits for certain educational expenses.

          For example, Reed admitted he prepared at least 384 returns that falsely stated that the client had earned income from Schedule C sole proprietorships, which are tax forms used by the self-employed to report business profits or losses. In reality, Reed knew his clients did not work at all during the year, had not earned income, and were not required to file an income tax return, the plea agreement states. On at least 79 tax returns, Reed admitted he created phantom business income or losses and claimed false dependents on clients’ tax returns in order to generate tax refunds to which the clients weren’t entitled. On at least 114 tax returns, Reed falsely claimed that the clients had educational expenses that resulted in refunds to which they weren’t entitled.

          Though Reed prepared federal income tax returns for clients, he did not sign their returns to identify himself to the IRS as the returns’ preparer, but rather stated on the tax returns that they were “self-prepared,” the plea agreement states. Reed admitted that he charged clients between $350 and $1,350 to prepare and file income tax returns.

          The false tax returns Reed prepared resulted in a loss of $2,158,337 to the IRS, according to the plea agreement.

          This matter was investigated by IRS Criminal Investigation.

          This case is being prosecuted by Assistant United States Attorney Valerie L. Makarewicz of the Major Frauds Section.

Docket (0 Docs):   https://docs.google.com/spreadsheets/d/1zCP8jPZqaESy5N5ZhdNeezaTyCDXai76r7bGaUoMZS4
  Last Updated: 2023-10-19 05:26:28 UTC
Description: The fiscal year of the data file obtained from the AOUSC
Format: YYYY

Description: The code of the federal judicial circuit where the case was located
Format: A2

Description: The code of the federal judicial district where the case was located
Format: A2

Description: The code of the district office where the case was located
Format: A2

Description: Docket number assigned by the district to the case
Format: A7

Description: A unique number assigned to each defendant in a case which cannot be modified by the court
Format: A3

Description: A unique number assigned to each defendant in a case which can be modified by the court
Format: A3

Description: A sequential number indicating whether a case is an original proceeding or a reopen
Format: N5

Description: Case type associated with the current defendant record
Format: A2

Description: A concatenation of district, office, docket number, case type, defendant number, and reopen sequence number
Format: A18

Description: A concatenation of district, office, docket number, case type, and reopen sequence number
Format: A15

Description: The status of the defendant as assigned by the AOUSC
Format: A2

Description: A code indicating the fugitive status of a defendant
Format: A1

Description: The date upon which a defendant became a fugitive
Format: YYYYMMDD

Description: The date upon which a fugitive defendant was taken into custody
Format: YYYYMMDD

Description: The date when a case was first docketed in the district court
Format: YYYYMMDD

Description: The date upon which proceedings in a case commenced on charges pending in the district court where the defendant appeared, or the date of the defendant’s felony-waiver of indictment
Format: YYYYMMDD

Description: A code used to identify the nature of the proceeding
Format: N2

Description: The date when a defendant first appeared before a judicial officer in the district court where a charge was pending
Format: YYYYMMDD

Description: A code indicating the event by which a defendant appeared before a judicial officer in the district court where a charge was pending
Format: A2

Description: A code indicating the type of legal counsel assigned to a defendant
Format: N2

Description: The title and section of the U.S. Code applicable to the offense committed which carried the highest severity
Format: A20

Description: A code indicating the level of offense associated with FTITLE1
Format: N2

Description: The four digit AO offense code associated with FTITLE1
Format: A4

Description: The four digit D2 offense code associated with FTITLE1
Format: A4

Description: A code indicating the severity associated with FTITLE1
Format: A3

Description: The FIPS code used to indicate the county or parish where an offense was committed
Format: A5

Description: The date of the last action taken on the record
Format: YYYYMMDD

Description: The date upon which judicial proceedings before the court concluded
Format: YYYYMMDD

Description: The date upon which the final sentence is recorded on the docket
Format: YYYYMMDD

Description: The date upon which the case was closed
Format: YYYYMMDD

Description: The total fine imposed at sentencing for all offenses of which the defendant was convicted and a fine was imposed
Format: N8

Description: A count of defendants filed including inter-district transfers
Format: N1

Description: A count of defendants filed excluding inter-district transfers
Format: N1

Description: A count of original proceedings commenced
Format: N1

Description: A count of defendants filed whose proceedings commenced by reopen, remand, appeal, or retrial
Format: N1

Description: A count of defendants terminated including interdistrict transfers
Format: N1

Description: A count of defendants terminated excluding interdistrict transfers
Format: N1

Description: A count of original proceedings terminated
Format: N1

Description: A count of defendants terminated whose proceedings commenced by reopen, remand, appeal, or retrial
Format: N1

Description: A count of defendants pending as of the last day of the period including long term fugitives
Format: N1

Description: A count of defendants pending as of the last day of the period excluding long term fugitives
Format: N1

Description: The source from which the data were loaded into the AOUSC’s NewSTATS database
Format: A10

Description: A sequential number indicating the iteration of the defendant record
Format: N2

Description: The date the record was loaded into the AOUSC’s NewSTATS database
Format: YYYYMMDD

Description: Statistical year ID label on data file obtained from the AOUSC which represents termination year
Format: YYYY

Data imported from FJC Integrated Database
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