Virginia Beach Tax Fraud Lawyers

Virginia Beach Tax Fraud Lawyers

Richard Yanek of Virginia Beach withheld employment taxes from his employees’ paychecks for years. He gave them false tax forms showing the taxes had been paid. The employees believed their Social Security and Medicare contributions were being made. They weren’t. Yanek kept the money – over $1 million in employment taxes alone. Meanwhile, he paid for an oceanfront home mortgage, private school tuition, golf and yacht club memberships. His accountant prepared his personal tax returns. Yanek chose not to file them. His total tax fraud: $2.5 million. His sentence: 48 months in federal prison. The businessman who stole from his own employees to fund a luxury lifestyle discovered that federal investigators eventually trace where withheld taxes go.

The Eastern District of Virginia has seen tax fraud at scales that destroyed careers and businesses across the Hampton Roads region. A tax preparer convicted on 33 separate counts of filing fraudulent returns. A business owner who purchased an $820,000 yacht while failing to pay employment taxes. An assistant manager who stole identities while preparing returns. A Navy officer who committed procurement fraud and then failed to report the proceeds. When federal prosecutors in Norfolk bring tax charges, the defendants often appeared successful while hiding the crimes that funded their lifestyles – and their sentences reflect the betrayal of trust.

The Oceanfront Lifestyle Funded By Stolen Taxes

Richard Yanek operated businesses in Virginia Beach. Between 2013 and 2018, he withheld employment taxes from his employees’ wages – Social Security, Medicare, federal income taxes – but never paid those amounts to the IRS. The employees received paychecks with deductions. They received tax forms showing withholdings. But the money never reached the government.

Heres the thing about employment tax fraud at this scale. The employees dont know. They receive their W-2 forms. They file there tax returns based on those forms. They beleive everything is fine. Meanwhile, there employer has pocketed the money that was supposed to fund there Social Security credits and Medicare benefits. The employees who trusted Yanek discovered years of contributions had never been made. The betrayal was completly invisible untill investigators traced were the money actualy went.

Yanek didnt just keep the employment taxes. He also failed to file personal income tax returns since 2010, despite substantial earnings. His accountant prepared returns for tax years 2011 through 2016 showing taxes owed. The returns existed. Yanek intentionaly chose not to file them. The accountant who did the work watched his client refuse to submit the documents that would have triggered payment.

While owing over $2.5 million in taxes, Yanek spent millions on personal luxury expenses. An oceanfront home mortgage in Virginia Beach. Private school tuition for his children. Golf and yacht club memberships. The lifestyle that should have been funded by legitimate income was funded by stolen taxes. The employees whose withholdings never reached the IRS watched there employer live in an oceanfront home while there Social Security credits went unfunded.

Acting U.S. Attorney Raj Parekh stated that Yanek “has been held accountable for attempting to evade the payment of over $2.5 million in tax obligations while he was earning and spending millions of dollars on personal luxury expenses.” U.S. District Court sentenced Yanek to 48 months in federal prison. Four years for the businessman who gave employees false tax forms while keeping there money.

Phoenix Financial And 33 Counts Of Fraud

Nikia Tull of Norfolk operated Phoenix Financial Tax Service through YT Phoenix Enterprises, Inc., with offices in Virginia Beach, Chesapeake, and Suffolk. Between 2014 and 2018, she filed 33 fraudulent federal income tax returns for clients. Not a few scattered false returns. Thirty-three documented counts of fraud.

Heres the paradox that made Tull’s scheme work. She charged clients based on the number of forms filed with each return. More forms meant more fees. So she added forms clients didnt need – residential energy credits, unreimbursed employee expenses, charitable contributions, business losses. The clients didnt know these items were on there returns. The false deductions generated refunds while generating fees for Tull.

The scheme operated across three locations simultaneously. Virginia Beach. Chesapeake. Suffolk. The tax preparation service that appeared to be a legitimate multi-location business was actualy a fraud operation spread across the Hampton Roads region. Clients at each location recieved the same treatment – false items added without there knowledge to inflate both refunds and fees.

Tull also submitted forged and fraudulently altered bank statements to a lending company for loan applications totaling $70,000. The fraud wasnt limited to tax returns. The same willingness to fabricate documents that drove the tax scheme extended to loan fraud.

A federal jury convicted Tull on five counts of wire fraud and 33 counts of aiding in preparing false tax returns. Thirty-eight total convictions. U.S. District Court sentenced her to 33 months in federal prison and ordered $162,460 in restitution. The tax loss to the IRS from her scheme: approximately $230,000.

For anyone in Virginia Beach, Chesapeake, or Suffolk who used Phoenix Financial Tax Service between 2014 and 2018, the Tull case raises questions. Did your returns contain credits you didnt qualify for? Did your refund seem larger then expected? The returns filed by convicted fraudsters attract IRS scrutiny that persists for years.

The 820000 Dollar Yacht That Employment Taxes Built

Wendy Brockenbrough of Virginia Beach owned three different companies. From at least 2011 to 2019, she failed to pay over employment taxes withheld from employees at all three. The pattern was consistent across nearly a decade of business operations.

Heres the irony that defines the Brockenbrough case. She issued her employees weekly paystubs showing that appropriate payroll taxes were being withheld. She issued annual W-2 forms confirming the withholdings. The employees had every reason to beleive there taxes were being paid. But Brockenbrough withheld the money from paychecks and kept it instead of sending it to the IRS. The paperwork said one thing. Reality was another.

Her tax fraud totaled approximately $2.7 million in employment taxes never paid to the government. Nearly three million dollars that employees thought was being contributed to Social Security and Medicare on there behalf.

Instead of paying employment taxes, Brockenbrough lived what prosecutors described as a lavish lifestyle:

• She purchased a Regulator center console boat for approximately $126,000
• She purchased a Hatteras 60-foot yacht for approximately $820,000
• She purchased a Jeep Wrangler for approximately $41,000

The boats and vehicles that seemed like business success markers were actualy purchased with stolen employee withholdings.

Brockenbrough pleaded guilty to willfully failing to account for and pay employment taxes. She faces a maximum penalty of 15 years in federal prison. The business owner whose three companies processed payroll for years while never paying employment taxes faces sentencing that will reflect the scale of her fraud. The employees whose W-2s showed withholdings that were never paid will deal with Social Security and Medicare credit issues for years.

Express Tax Became Identity Theft

Tinesha Bert was the assistant manager of Express Tax Preparation Services, a Virginia Beach-based tax service that has since closed. From December 2014 to February 2016, she used false information in customers’ tax returns to generate higher refund amounts. But the fraud went beyond inflating existing clients’ returns.

Heres the thing about identity theft in tax preparation. Tax preparers have access to everything needed to file returns in someone else’s name. Names. Social Security numbers. Addresses. Bert filed returns using the names and Social Security numbers of real persons without there knowledge. People who never came to Express Tax Preparation Services had returns filed in there names by a preparer they had never met.

She also fabricated dependent children for clients to qualify them for beneficial tax credits. Clients who had no children, or fewer children then claimed, suddenly appeared in IRS systems with dependents that didnt exist. The false dependents generated credits. The credits generated refunds. The refunds generated fees for the tax service.

U.S. District Court sentenced Bert to more than four years in federal prison. The court found she was responsible for a tax loss of approximately $174,000. Four years for an assistant manager who stole identities while helping customers file returns. The people whose identities she used are now dealing with IRS records showing returns they never filed.

For anyone in Virginia Beach who used Express Tax Preparation Services during those years, the Bert case raises uncomfortable questions. Were your returns accurate? Were false dependents claimed? And if you never used the service – has anyone filed returns in your name based on information stolen from somewhere else?

COVID Credits Became Fraud Targets

Kendra Michelle Eley of Norfolk saw opportunity in COVID relief programs. Between October 2022 and May 2023, she filed eight Forms 941 – Employer’s Quarterly Federal Tax Returns – for her company Kreative Designs by Kendra, LLC. The forms covered tax periods in 2020 and 2021. They claimed wages paid and federal tax withholdings for eighteen employees.

Heres the uncomfortable truth. There were no employees. The eighteen people listed on the forms didnt exist as employees of Kreative Designs. The wages reported werent paid. The withholdings reported werent made. The entire submission was fabricated to claim COVID relief credits.

The false forms claimed:

• Sick and Family Leave Credits totaling approximately $713,000
• Employee Retention Credits through the CARES Act totaling approximately $252,000
• Total refunds claimed: over $900,000

Nearly a million dollars in fraudulent claims based on employees who never worked at a company that didnt have a payroll.

Eley pleaded guilty to one count of false claims and one count of engaging in monetary transactions in criminally derived property. She faces up to 10 years in federal prison at sentencing. The COVID credits designed to help businesses retain employees during the pandemic became tools for claiming refunds based on fictional employees who never existed.

For anyone in Virginia Beach who claimed COVID credits through aggressive promoters, the Eley case illustrates the exposure. The IRS is actively investigating COVID credit fraud. The Employee Retention Credit claims that seemed like free money are being audited. The returns filed during the pandemic relief period are under scrutiny that will persist for years.

The Navy Officer Who Didnt Report His Crimes

A Virginia Beach naval officer was responsible for ordering goods and confirming their delivery. That dual role gave him the ability to perpetrate a $2.7 million procurement fraud scheme for over 18 months without his command becoming aware. He and others pocketed hundreds of thousands of dollars from the scheme.

Heres the hidden connection that makes this case relevant to tax fraud. The money Prince and others stole through procurement fraud was income. Income that should have been reported on tax returns. Income that should have generated tax liability. Prince failed to report the proceeds of his fraud scheme as income on his 2014 tax return. The procurement fraud became tax fraud when he didnt report what he stole.

U.S. District Court sentenced Prince to over four years in federal prison for his role in the fraud scheme and for lying on his federal income tax return. The Navy officer whose position of trust enabled procurement fraud compounded his exposure by failing to report the proceeds. The theft was one crime. The failure to pay taxes on the theft was another.

Karl Burden-El Bey of Hampton operated a tax preparation business for years while committing fraud that spanned multiple tax seasons. From at least 2013 through 2019, he created false tax returns for clients. The evidence at trial demonstrated that his criminal conduct included assisting in the preparation of false tax returns, stealing government funds, and failing to file personal federal income tax returns even though he held a trusted position as a tax preparer. U.S. District Court sentenced Burden-El Bey to more then six years in federal prison. The preparer who filed fraudulent returns for clients while failing to file his own returns discovered that the fraud dosent stay hidden permanantly. The tax preparer who basicly ignored his own tax obligations while manufacturing fraudulent returns for clients served as both perpetrator and example of willful noncompliance.

For anyone in the military community around Virginia Beach, the Prince case demonstrates how fraud schemes interact with tax obligations. Illegally obtained income is still taxable income. Failing to report it adds tax charges to whatever underlying fraud existed. The officer who thought he had hidden his scheme discovered that unreported income eventually gets traced back to its source.

Virginias Dual Prosecution Reality

Virginia has a state income tax ranging from 2% to 5.75%. Unlike Florida or Texas with no state income tax, Virginia has BOTH state AND federal tax fraud enforcement. The Virginia Department of Taxation investigates state tax crimes. Federal prosecutors in the Eastern District of Virginia handle IRS cases.

Heres what that means practicaly. A single fraud scheme can trigger investigation by Virginia tax authorities AND the IRS simultaneosly. Cases can be prosecuted at the state level, the federal level, or both. The same conduct that violates federal tax law may also violate Virginia tax law. Dual exposure that dosent exist in no-income-tax states.

The Hampton Roads area has seen extraordinary sentences for tax fraud. One businessman received 168 months – fourteen years – for combined bank and tax fraud. A developer received 138 months for similar combined charges. The Eastern District of Virginia’s Norfolk Division handles these cases aggressivly.

And the military presence in Hampton Roads creates unique exposure. Navy and military personnel with access to procurement systems face potential fraud charges that compound when they fail to report illegaly obtained income. The tax charges add to whatever military justice or federal fraud charges already exist. The Hampton Roads region with its concentration of naval bases and military contractors creates opportunites for fraud that eventualy become federal prosecutions when investigators trace the money.

The 90% federal conviction rate applies here as forcefuly as anywhere. Federal prosecutors in the Eastern District of Virginia dont bring cases they cant prove. By the time your indicted, theyve already determined the evidence is sufficient. The returns you filed, the withholdings you kept, the income you didnt report – its all documented before you know your being investigated.

Defense Strategy In Virginia Beach

If your facing tax fraud exposure in Virginia Beach, the calculus involves understanding how the Eastern District operates.

The Yanek case shows that employment tax fraud gets prosecuted even when employees dont know there withholdings werent paid. The Tull case shows that preparer fraud across multiple locations results in conviction on every count – 33 returns meant 33 convictions. The Brockenbrough case shows that lifestyle funded by stolen taxes becomes evidence of the fraud. The Bert case shows that identity theft compounds tax fraud into longer sentences.

Heres what these cases have in common. By the time defendants faced prosecution, there options had narrowed dramaticaly. The investigations were complete. The evidence was gathered. The schemes were documented. The 90% federal conviction rate means fighting the charges rarely succeeds. The only questions were conviction and sentencing.

The time to address tax fraud exposure is before any of that happens. Voluntary disclosure programs exist. Coming forward before the IRS finds you creates opportunities to resolve issues civily – with penalties and interest, but potentialy without prison. And in Virginia, addressing issues proactivly can prevent state prosecution from developing alongside federal exposure.

If an investigation has already begun, damage control becomes the priority. Understanding what investigators know. Protecting against self-incrimination. Navigating toward the least damaging outcome possible in a district that has imposed sentences exceeding ten years for tax fraud.

Why Virginia Beach Specificaly Creates Exposure

Virginia Beach’s economy creates particular tax fraud exposure. The tax preparation industry where businesses like Phoenix Financial operated fraud schemes across multiple locations. The small business environment where employers like Yanek and Brockenbrough kept employment taxes instead of paying them to the IRS. The military installations where procurement fraud overlaps with tax fraud when proceeds go unreported.

The Yanek case reveals how oceanfront lifestyles funded by stolen taxes eventualy attract investigators who trace where the money came from. The Tull case shows how multi-location tax services can file dozens of fraudulent returns before patterns become visible. The Brockenbrough case demonstrates how $820,000 yachts purchased while owing $2.7 million in employment taxes become evidence of fraud.

And Virginias state income tax creates exposure that dosent exist in no-income-tax states. The Virginia Department of Taxation pursues violations of state tax law. Federal prosecutors handle IRS cases. Both systems are active. Both coordinate regularely.

If theres tax fraud exposure in your situation – employment taxes you didnt remit, returns prepared by someone now under investigation, income you didnt report – the time to address it is before investigators start looking. Not after the investigation begins.

Heres the thing about prosecution in Virginia Beach. The Eastern District of Virginia has shown through the Yanek case, the Tull case, the Brockenbrough case, and dozens of others that it pursues tax fraud aggressivly. The sentences can be extraordinary – 168 months for combined fraud cases, four years for Yanek, four years for Bert. The 90% federal conviction rate means most people charged get convicted. Your exposure persists untill you address it. The dual prosecution system Virginia creates means the question isnt just wheather you face federal charges – its wheather you face state charges too.