Inglewood-based Tax Preparer Indicted in $5 Million Tax Fraud Case
LOS ANGELES – A tax preparer and former California Franchise Tax Board employee was arrested today on a 26-count federal grand jury indictment alleging he schemed to defraud the Internal Revenue Service by declaring fictitious withholdings used to fraudulently claim tax refunds of more than $5 million.
Cubby Wayne Williams, 63, of Alhambra, was arraigned this afternoon in United States District Court on 22 counts of assisting in the preparation of false tax returns for his clients and four counts of subscribing to false tax returns for himself. United States District Judge Percy Anderson has scheduled a May 13 trial-setting hearing for Williams, who is free on $20,000 bond.
According to the indictment, Williams owns and operates Williams Financial Network, an Inglewood-based tax services company. Prior to forming this company, Williams worked from 1985 to 1996 as a compliance representative in the California Franchise Tax Board’s collection division.
Williams allegedly filed tax returns claiming that his clients had accrued Original Issue Discount (OID) interest income. OID is a form of interest that accrues over the life of a bond or other debt instrument, but is not payable as it accrues. Financial institutions use IRS Forms 1099-OID to report this accrued, but unpaid, income, and any tax withholdings on it.
Read more: https://www.justice.gov/usao-cdca/pr/inglewood-based-tax-preparer-indicted-5-million-tax-fraud-case