A North Miami man who claimed to be an entertainment honcho is convicted of tax fraud

01/16/2014 4:21 PM

01/16/2014 4:21 PM

An unemployed North Miami man who claimed to be a highly paid entertainment executive was convicted by a federal jury Thursday on charges of filing a false $600,000 refund claim on his 2012 income-tax return.

Jean Louis, whose last real job was at a local bait-packing company, claimed he earned $9.8 million as a marketing director for Warner Brothers Distribution Corp. and that the company withheld $3.8 million for taxes.

Last year, the Internal Revenue Service not only issued him the astronomical refund but added $3,500 in interest for being late with the payment. The IRS refund was directly deposited into Louis’ account at a Citibank branch in Miami Beach.

When IRS agents caught up with the 40-year-old last July, he told them: “Sometimes people get lucky.”

“This return was completely bogus,” Assistant U.S. Attorney Michael Berger told the Miami federal jury Wednesday, pointing out that Warner Brothers Distribution has not been in business for the more than 20 years.

He added that Louis previously sought a $7,465 refund on his 2011 tax return, claiming he had made $56,000 from Baitmasters of South Florida. His actual income there: $500.

“He went from small tax fraud to the big leagues,” Berger told the jurors during opening statements.

Louis, 40, who did not testify at the two-day trial, was convicted by the 12-person jury of filing a false refund claim and committing wire fraud. He faces sentencing March 18 before U.S. District Judge Donald Middlebrooks, who revoked his bond and ordered him into custody. The false claim conviction carries up to five years and the wire fraud offense up to 20 years.

Louis’ defense attorney tried to convince jurors that his client did not swindle the IRS, but was victimized by another North Miami man who prepared his 2011 and 2012 tax returns.

Assistant Federal Public Defender Michael Spivack said that Louis relied on Gerald Duverger because they were both Haitian immigrants and he needed assistance in filing his tax returns. He pointed out that Duverger collected a whopping $600,000 refund on his own 2011 tax and took advantage of Louis to enrich himself again.

“Duverger used him,” Spivack told the jurors before the prosecution put on its case.

But at trial, the prosecutor produced evidence showing that Louis wrote checks for $8,000 each to two people who assisted him on his 2012 tax return, including Duverger.

The IRS directly deposited $603,883 refund into Louis’ business account, J.L.L. Multi Services, at CitiBank in Miami Beach last year. He got into trouble when he tried to withdraw some money from the account in July. He told the branch manager that the massive deposit was from a marketing contract with a strip club called King of Diamond, in Miami Gardens.

The branch manager didn’t believe him, saying it was an income-tax refund, and told Louis to bring in his documents to verify the deposit.

Louis, accompanied by Duverger and an unidentified bodyguard, visited the Citibank branch, showing the manager his fabricated tax forms.

Bank officials alerted the Miami Beach Police Department, and officers detained the three for questioning. Police also called IRS criminal investigators and a U.S. Postal inspector.

The investigators found a blue file folder in Louis’ possession, which included his 2012 tax return and a J.L.L. Multi Services check for $25,000 issued to him.

Louis told IRS agents that he didn’t work for Warner Brothers and that Duverger helped him prepare his tax return.

Duverger was also taken into custody. In November, he pleaded guilty to fraud charges stemming from his filing false 2011 and 2012 tax returns, which included about $600,000 refund claims each time.

He claimed to be a Capitol Records executive who made $8.7 million and that his employer withheld about $3.5 million in taxes.

It was all a scam. The IRS fell for it the first time, but not the second.

During trial, Berger, the prosecutor, asked an IRS official on the witness stand whether the agency is required by law to pay refunds quickly. Her answer: within six weeks. He also asked the witness whether the IRS matches an employee’s W-2 income form with that of his employer in real time.

Victoria O’Brien, an IRS records custodian, said the agency compares the two forms about six months after the filing season ends.

As a result, phony tax returns — especially those with stolen Social Security numbers used to file fraudulent claims — slip through the system early in the tax season.

To put a point on it, Berger asked: “Is the IRS a pay first, check later system?”

Said O’Brien: “That’s true.”

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