An Essex County, N.J., tax return preparer who allegedly filed hundreds of phony federal income tax returns using the identity of a dead return preparer whose business he bought was arrested by federal agents early Thursday morning.
Todd P. Halpern, 46, of Livingston, N.J., was charged with one count of tax fraud and one count of identity theft. Halpern was arrested at his home by agents of the FBI and IRS, according to U.S. Attorney Paul J. Fishman’s office.
Halpern was scheduled to make his initial appearance before U.S. Magistrate Judge Michael A. Shipp in Newark federal court.
Halpern prepared and filed 657 fraudulent federal income tax returns with the IRS in 2009 and 2010 using the Electronic Filing Identification Number of a deceased tax return preparer, according to documents filed in the case by the IRS and prosecutors. Halpern prepared and filed the tax returns using stolen identities of actual taxpayers, without their knowledge. The tax returns contained fraudulent income and deduction amounts, which allowed Halpern to receive tax refunds deposited directly into his personal bank account.
In late 2008, Halpern purchased A & V Financial, a tax preparation business located in Guttenberg, N.J., from the widow of the prior owner, V.R., who died in March 2008. Halpern received the company’s computers and all of its client records. As part of the purchase agreement, Halpern was to obtain a new EFIN number in his own name for A & V.
Instead, he continued to file tax returns using V.R.’s EFIN number, even though V.R. was dead, because Halpern’s criminal record prevented him from obtaining an EFIN.
In one case, Halpern prepared and filed a fraudulent 2008 1040 form for an individual identified only as “B.G.” Halpern used the name V.R. at A & V in the preparer portion of the tax return. The tax return contained fraudulent income and deductions, which generated a refund that was directly deposited into Halpern’s personal bank account.
B.G. later told IRS agents she does not file tax returns because she has no income. Her Social Security number appears on her son’s tax returns, because she is a dependent. B.G.’s son used Halpern to prepare his tax returns.
In another case, Halpern prepared and filed a fraudulent 1040 form for an individual identified as “J.P., generating a refund that was deposited directly into Halpern’s bank account.
J.P. later told IRS agents he had never heard of Halpern and did not authorize Halpern to prepare and file his tax returns.
IRS agents determined that $373,938 in refunds from fraudulent tax returns were wired into Halpern’s personal bank account between July 2009 and August 2009. Halpern used these funds to make purchases at Prada, Chanel, Saks Fifth Avenue, and Bloomingdales, to acquire season tickets to the New York Giants, to purchase thousands of dollars in jewelry, gold coins, and silver certificates, to make car payments on multiple luxury vehicles, including a 2007 Cadillac Escalade and a 2008 Lexus GX-470, and to buy car parts for his classic 1957 Chevy Bel Air.
The charges of tax fraud and identity theft are each punishable by a maximum potential penalty of five years in prison and a fine of $250,000.
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