Pollock Pines woman sentenced to 10 years after $9M tax fraud scheme

Teresa Marty will be spending the next ten years in prison after causing the IRS to pay more than $9 million in false refunds.

The 57-year-old Pollock Pines woman owned Advanced Financial Services (AFS), a tax return preparation business located in Placerville. She conspired with her office manager, Pamela Harris and Rebecca Bandera-Marty to file more than 250 fraudulent federal tax returns claiming more than $60 million in refunds.

Marty and Harris recruited clients by falsely representing that the clients could legally receive large refunds by filing tax returns using IRS Forms 1099-OID. AFS prepared false Forms 1099-OID that reported the clients’ debts as income and the same amount as income tax withheld, resulting in significant claims for refund to which the clients were not entitled. The scheme included clients from 26 states and caused the IRS to pay out over 40 tax refunds, totaling more than $9 million. The IRS listed the use of false Forms 1099-OID on its website as one of the “dirty dozen” tax schemes for the years 2009 through 2014.

Marty, Harris and Bandera-Marty were indicted in June 2013 along with two clients, Charles and Victoria Tingler. Thereafter, Marty and the Tinglers, with the help of Harris, filed fraudulent multimillion dollar liens against government officials, including three IRS employees involved in the collection of taxes the Tinglers owed the IRS as a result of the scheme. Marty filed $84 million liens against the then Acting U.S. Attorney for the Eastern District of California and a former Department of Justice Tax Division attorney involved in filing suit to permanently enjoin Marty and AFS from preparing tax returns. The liens filed with the California Secretary of State unlawfully disclosed personal identification information of the government employees. Harris and Marty also hired a collection agency to enforce a $500,000 false lien that Charles Tingler filed against an IRS revenue officer.

“Today’s sentence sends a strong message: preparers like Teresa Marty who file fraudulent returns will be actively investigated and prosecuted, and face jail and significant penalties,” said Acting Deputy Assistant Attorney General Goldberg. “And efforts by such individuals to intimidate and harass the federal attorneys and agents working these cases will be thwarted and in fact result in the imposition of a higher sentence.”

“Teresa Marty recruited many individuals to participate in a scheme that she claimed to have ‘perfected’ from co-defendant Harris, who traveled to help her recruit clients, to her daughter-in-law, Bandera-Marty, who churned out fraudulent tax return forms. She used her qualifications as an IRS Enrolled Agent and California licensed tax preparer to market her scheme to clients,” U.S. Attorney Talbert stated. “When the IRS shut down her business, she retaliated by filing liens against those who were assigned to stop her fraud. At least 20 clients of Marty and Advanced Financial Services have been prosecuted throughout the country for fraudulent returns during this scheme. Today’s sentences reflect the gravity of the offenses and should deter others from violating the tax laws.”

In addition to the term of prison imposed, Marty was ordered to serve two years of supervised release and to pay $9,500,492 in restitution to the IRS.

Clients of AFS have been prosecuted in Arizona, Colorado, Florida, Georgia, Missouri, Oregon and Washington for filing false claims for refund that Marty and AFS prepared.

Acting Deputy Assistant Attorney General Goldberg and U.S. Attorney Talbert commended special agents of IRS-Criminal Investigation and Treasury Inspector General for Tax Administration (TIGTA), who conducted the investigation, and Trial Attorneys Erin S. Mellen and Andrea A. Kafka of the Tax Division and Assistant U.S. Attorney Matthew D. Segal, who prosecuted the case.