Adding a new college-connected angle to tax fraud garnered $2.4 million for Pompano Beach convicted fraudster Patrick Bernavil, money he used for adult entertainment, Disney on Ice and Haitian hotel stays, among other things.
Getting busted employing that angle got Bernavil sentenced to two-and-a-half years in federal prison last week.
Bernavil pleaded guilty to one count of aiding and abetting the preparation and presentation of fraudulent income tax returns and one count of presentation of fraudulent returns. He’s got a fraudulent past, albeit a distant one. He entered a guilty plea to grand theft and credit card/bank card fraud in a 1999 case.
Among Bernavil’s many businesses was Bernavil Multi-Services, which did business as BMS Tax and Accounting Services. Bernavil didn’t get involved in the typical modern tax fraud scheme that includes identity theft. Instead, the stipulated-facts document says Bernavil focused his fraud on the American Opportunity Tax Credit (AOTC).
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“The AOTC is a tax credit of up to $2,500 per year for qualified educational expenses paid for an eligible student for the first four years of higher education,” the court documents explain. “This credit directly reduces the tax due and owing by the taxpayer.”
About 3,000 BMS-prepared tax returns for 2011-13 claimed the credit for clients who weren’t eligible, resulting in $2,428,731 in fraudulently paid returns. Most of the clients were seasonal workers in Broward and Palm Beach counties on H2B visas, which allowed them to work here for a defined time.
“These foreign national clients were not knowledgeable about United States income tax laws and relied upon Bernavil, and his employees, to properly complete and file their tax returns utilizing IRS form 1040,” according to the court documents.
Meanwhile, Bernavil didn’t file any tax returns himself in 2014 and understated his income in 2012 and 2013 while paying personal expenses out of BMS’ account, the court documents say. He even claimed an AOTC credit for 2012 by stating he was a student at the Art Institute of Fort Lauderdale, where he had been a student from 2007-09.
He also engaged in a little corporate fraud by using BMS’ business debit card for such things as adult entertainment, a cruise, gym membership, hotels in Haiti, movie tickets, Disney on Ice, bowling, Red Box movies, liquor and groceries, according to the court documents. He also transferred money from BMS’ account and a Uniform Transfer to Minor Account set up in his son’s name to personal and business accounts at the Societe Generale Haitienne De Banque, SA, and Unibank, SA in Port-Au-Prince, Haiti.
Bernavil’s own tax dodging added up to $183,471, for a total restitution due of $2,612,202. Restitution can start being paid during his prison time. If Bernavil earns money in a prison job, half of it goes toward the restitution. If he doesn’t have a prison job, he has to pay at least $25 each quarter. After his release, he’ll pay 10 percent of his monthly gross earnings.