ORLANDO, Fla. – Following a News 6 investigation into a tax preparation business accused of falsifying customers’ income tax returns, the company’s three owners have been sentenced to federal prison.
Franklin Carter, Emmanuel Almonor, and Jonathan Carrillo operated Neighborhood Advance Tax, a chain of 12 Central Florida tax preparation offices that promised to get customers the “maximum refund”.
[VIDEO: Central Florida tax preparers plead guilty to fraud charges]
Carrillo and Carter later opened a similar company called Taxmates in some of the same strip mall storefronts previously occupied by Neighborhood Advance Tax, prosecutors said.
The three business owners were arrested last year and have since pleaded guilty to conspiring to defraud the United States.
[VIDEO: New operator takes over ‘troubled’ tax preparation business]
Carter pleaded guilty to additional charges of failing to file his own income tax returns, while Carrillo pleaded guilty to aiding in the preparation of false tax returns.
During back-to-back hearings Wednesday, U.S. District Judge Wendy Berger sentenced Carrillo to 12 years in federal prison and ordered Carter to serve a seven-year prison sentence.
Almonor was sentenced to nearly five years in prison during a hearing last month.
Five lower-level employees of Neighborhood Advance Tax also pleaded guilty to federal crimes.
Adon Hemley was sentenced to nearly four years in prison.
Diandre Mentor, who prosecutors said later started his own tax preparation business called Smart Tax & Finance, was sentenced to 3 years in prison.
Abryle De La Cruz was sentenced to three years of supervised release.
Isaiah Hayes and Kaylah Dacosta were placed on probation.
Prosecutors said the scheme cost the federal government more than $12 million in lost tax revenue.
The defendants are required to repay that money as part of their sentences.
“This is a very large scale financial fraud crime,” Berger said shortly before sentencing Carter. “The innocent people who hired you for your services were harmed.”
News 6 began investigating complaints against Neighborhood Advance Tax in 2020 after several former customers said they were audited by the Internal Revenue Service and ordered to repay thousands of dollars in undeserved tax refunds.
The tax preparation company charged customers as much as $999 to file their income tax returns while promising to get them “maximum refund”.
IRS audits later revealed some Neighborhood Advance Tax customers had claimed improper tax deductions and inflated charitable contributions to lower their initial tax bills.
Doreen Bowden said a Neighborhood Advance Tax employee originally told her she would be receiving a $4,379 refund for her 2019 tax return.
But after the IRS audited Bowden, she learned she was not entitled to any refund and instead owed the federal government an additional $1,095 in income taxes.
Bowden, who hired Neighborhood Advance Tax because she was uncomfortable preparing her own tax return, insists she was unaware it contained inaccurate financial information.
“I would never do something like that, especially with the IRS,” Bowden told News 6 in 2020. “I’m a very scared person.”
Days after News 6 published its first story about Neighborhood Advance Tax, IRS criminal investigators sent a subpoena to the company seeking various documents, court records show.
Last year a federal grand jury indicted eight people who worked for Neighborhood Advance Tax including the company’s three owners.
The operators of Neighborhood Advance Tax created a training manual that instructed tax preparers how to fraudulently increase customers’ tax refunds without being “flagged” by the IRS, the indictment alleged.
Tax preparers were also trained not to disclose fraudulently prepared tax documents to customers, according to the indictment.
Carter received nearly $2 million from the company over four years, court records show.
The judge expressed concern that Carter used some of those funds to lease a Lamborghini for $6,000 a month.
“I don’t know what happened to all the money you made, but you need to pay it back,” said Berger.
Carter, who prosecutors said was the head of Neighborhood Advance Tax, told the judge he was accepting responsibility for his role in the conspiracy.
“I’m apologizing to any victims, the government, my clients,” said Carter, who claimed he initially did not realize he was breaking the law.
When the judge asked Carter when he learned his tax prep business was involved in illegal activity, Carter referenced News 6’s reporting in 2020.
“When we started getting audits and the news came up on it,” Cater told the judge.
The IRS offers advice on its website for choosing a qualified tax preparer.
The agency also warns against so-called “ghost” preparers who do not sign tax returns or fail to include a Preparer Tax Identification Number or PTIN.
If a tax preparer attempts to generate a larger refund by creating false exemptions or omitting income, the IRS encourages taxpayers to file a complaint.