A mother and son are facing a minimum of five years in jail after being found guilty of filing fraudulent corporate tax returns for their marketing business. They submitted false summaries of business expenses that included many personal items and some non-existent charges as well.
Here are the details according to the Justice Department report:
According to the evidence presented at trial, Howard Hsu owned and operated Didsee Corporation (Didsee), a Nevada company that provided advertisement marketing services to online websites and marketplaces. Tracy Chang, Hsu’s mother, was Didsee’s bookkeeper and was listed as the President, Secretary, Treasurer and Director. Chang opened bank accounts for the business, transferred money between the various accounts, and paid Didsee’s bills.
Hsu and Chang conspired together to file fraudulent 2008 through 2009 corporate income tax returns, and an amended 2007 corporate tax return, cheating the Internal Revenue Service (IRS) out of approximately $400,000. They provided false summaries to Didsee’s return preparers, which claimed business expenses that were never incurred and included Hsu’s personal expenses. Chang signed the fraudulent returns as Didsee’s President.
“Owners can’t use their businesses as piggybanks, paying personal expenses out of their corporate accounts and falsely claiming them as business expenses,” said Acting Deputy Assistant Attorney General Goldberg. “All employers are legally required to file accurate and complete returns and pay their fair share – just like their employees.”
“This case was not about a mistake or a misunderstanding, it was about greed,” said Special Agent in Charge Michael T. Batdorf of IRS Criminal Investigation (CI). “Tracy Chang agreed to help her son, Howard Hsu and his business cheat the IRS. Hsu fabricated millions of dollars in expenses and Chang knew the expenses were false. She maintained the books and signed the tax returns while Hsu gave the CPA the “cooked books”. In today’s economic environment, it’s more important than ever that the American people feel confident that everyone is playing by the rules and paying the taxes they owe.”
A sentencing date has not been scheduled. Hsu and Chang face a statutory maximum sentence of five years in prison for the conspiracy count and three years in prison for the false return counts. Hsu and Chang also face a period of supervised release, restitution and monetary penalties.
Anyone facing a similar situation regarding tax fraud charges should speak with a tax lawyer. With offices in Cleveland and Chicago, that have represented clients in approximately 45 states and 15 countries, the tax attorneys of Robert J. Fedor, Esq. LLC are experienced in criminal tax defense matters.
