Two Brothers Sentenced To Federal Prison For Operating Sham Tax Prep Firm, Stealing Nearly $500,000 In Clients' Refunds
PHILADELPHIA (CBS) -- Our tax system is based on an honor code but two tax preparers who are brothers were sentenced to federal jail time on Wednesday. They admitted to stealing almost $500,000 in refunds from their own clients.
Omar Faruq, 36, raced out of the federal courthouse. His brother, 37-year-old Omar Ali, didn't answer any questions either.
Federal prosecutors say the men operated a tax prep firm that turned out to be a sham.
"They were telling taxpayers, clients who had come to their tax preparation business, that they were gonna get big refunds, tax refunds," Assistant U.S. Attorney Richard Barrett said.
However, that didn't happen. Prosecutors discovered the brothers operated Omar Consultancy Inc., with offices in Pennsauken, Camden County and another in Upper Darby, Delaware County from 2013 to 2015.
That's when they filed 140 tax returns with false information. Ali and Faruq then gave their clients different copies of the returns, and without their clients knowing, the brothers deposited nearly $500,000 from their clients' tax refunds into their bank accounts.
It was an elaborate scheme, despite Ali's defense attorney admitting his client had no tax prep qualifications.
"Unfortunately, tax preparers are not required to be certified, so you have people preparing returns who really don't know what they're doing. And that's his case," attorney Gil Scutti said.
The IRS says there are ways to protect yourself from bogus businesses. People should check if the preparer is qualified using the IRS' online database, verify the preparer's history with the Better Business Bureau and ensure the preparer includes their prepared tax ID number which is required by law.
Both brothers are due to their first day of federal prison next month.
Ali was sentenced to one-and-a-half years in prison, while Faruq was sentenced to two years because he was the mastermind.
