 TRENTON —Attorney
General Peter C. Harvey today announced that a joint-agency tax fraud
investigation targeting the theft of thousands of dollars from the state
treasury has resulted in the arrest of an Essex County tax preparer on
charges of filing hundreds of false or fraudulent New Jersey State Income
Tax Returns which resulted in unentitled refunds being issued in the
names of fictitious “taxpayers.” The ongoing investigation
has uncovered the filing of nearly 300 fraudulent New Jersey tax returns
seeking over $195,000 in illegal refunds.
“This investigation uncovered a deliberate and blatant attempt
to steal tens of thousands of dollars from the state treasury through
the filing of hundreds of false or fraudulent tax returns. The prosecution
of this defendant demonstrates the resolve and forward thinking by
the Division of Criminal Justice and the Division of Taxation as they
undertake concerted efforts to target those who attempt to steal or
cheat the treasury,” said Attorney General Harvey. “Make
no mistake, we intend to recover tax dollars owed to both the state
treasury and to New Jersey’s honest taxpayers.”
Treasurer
John E. McCormac noted that this violator attempted to abuse, for
his personal gain, a tax refund program which had been established
to assist the working poor, and that such offenses, committed during
a period of significant budgetary pressures, “victimize all New
Jersey citizens.”
Vaughn
L. McKoy, Director, Division of Criminal Justice and Robert K. Thompson,
Director, Division of Taxation, said that Ramoni Mustapha,
50, 221, Custer Ave., Newark, Essex County, was arrested and charged
via a criminal complaint with theft by deception and filing and/or
preparing false or fraudulent tax returns. Mustapha, a self-employed
tax preparer and the owner/operator of Ramsalam Business and Tax Consultancy
located at 103-105 South Day St., Orange, Essex County, was arrested
on April 15 at his Orange business location by State Investigators
from the Division of Criminal Justice - Financial Crimes Bureau and
tax agents from the Division of Taxation’s Office of Criminal
Investigations.
Criminal
Justice Director McKoy noted that in conjunction with Mustapha’s
arrest, the state law enforcement agents conducted a search of Mustapha’s
office pursuant to a court authorized search warrant issued by Mercer
County Superior Court Judge Charles A. Delehey. As a result of the
search warrant, State Investigators confiscated and seized tax returns,
various tax documents and records, computer systems, false/fraudulent
credit cards and identification documents, and related evidence. Mustapha
has been released from the Mercer County Jail after posting $100,000
bail. An arraignment hearing will be scheduled. The second degree charges
each carry a maximum penalty of up to ten years in state prison and
a fine of up to $150,000 upon conviction.
The
criminal complaint alleges that Mustapha filed at least 293 fictitious
and/or fraudulent resident New Jersey State Income Tax returns for
the tax years 2001 and 2002. The Division of Taxation determined that
the purported fraudulent returns were filed during 2004 and 2005 and
that $194,693 in Earned Income Tax Credit (EITC) refund checks were
issued. It is alleged that Mustapha prepared and filed the fraudulent
state income tax returns based on false identifying information which
qualified the “taxpayer” for an unentitled refund of up
to $725.00 using the EITC. The EITC gives taxpayers a New Jersey refund
based on the percentage of money refunded on the federal tax return.
In order to claim the EITC, individuals must meet certain criteria,
including filing a federal EITC, have at least one qualifying child
listed on the Federal EITC Schedule, have New Jersey gross income of
$20,000 or less, and have the same filing status on both the state
and federal tax returns.
Director
Thompson commended the Division of Criminal Justice for immediately
mobilizing its resources to quickly obtain the necessary search and
arrest warrants after discovery of the scheme by the Division of Taxation’s
forensic auditors.
“With the arrest and filing of criminal charges against Mustapha,
the alleged illegal tax preparation operation has been effectively
shut-down,” said Criminal Justice Director McKoy. “The
investigation will be presented to a State Grand Jury for possible
indictment.”
Chief
Investigator Sue Kane of the Division of Taxation - Office of Criminal
Investigation and State Investigator Eric Ludwick of the Division
of Criminal Justice - Financial Crimes Bureau coordinated the investigation.
Supervising Deputy Attorney General Terrence Hull and Deputy Attorney
Denise Grugan of the Division of Criminal Justice - Financial Crimes
Bureau along with Assistant Chief Rich Mawer and Assistant Chief Bob
Morris of the Division of Taxation’s Office of Criminal Investigation,
conducted the investigation.
Director
Thompson noted that anyone with information about unscrupulous tax
preparers, or any type of tax fraud, are encouraged to contact
the New Jersey Division of Taxation’s “Citizens
Against Tax Cheats or CATCH” program. The hotline number is: (609)
292 6400. Information can also be mailed to the New Jersey Division of
Taxation, 50 Barrack Street, P.O. Box 190, Trenton, NJ 08695 0190,
Attention: Citizens Against Tax Cheats.
In
announcing the criminal investigation, Director McKoy noted that
the Division of Criminal Justice has established a toll-free “Corruption
TipLine” at 1-866-TIPS-4CJ for the public to report corruption,
financial crime, and other illegal activities. Any information received
via the Division of Criminal Justice “Corruption TipLine” or
the Division of Taxation “CATCH Hotline” will remain confidential.
Additional information is available via the Division of Criminal Justice
Web Page @ www.njdcj.org.
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