From the Tax Law Offices of David W. Klasing - Michigan Married Couple with Home Health Care Company Sentenced for Tax Evasion and Kickback Scheme

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Tax Law Offices of David W. Klasing, PC

Oct 10, 2024, 06:37 ET

IRVINE, Calif., Oct. 10, 2024 /PRNewswire/ -- Despite claiming to offer health services to Medicare beneficiaries, husband and wife Noli and Isabel Tcruz engaged in a kickback fraud scheme, bribing physicians for patient referrals and stealing from government programs. They brought in millions in the process, only to be sentenced for their crimes recently in September 2024.

After shutting down their healthcare operations for good, Noli Tcruz used a false identity to get COVID-19 relief funds for small businesses. Furthermore, the Tcruzes went to lengths to hide their incomes and avoid paying income tax, leading to the prosecution bringing charges for tax evasion and healthcare fraud. Both spouses were sentenced in September 2024 after being convicted: Noli to six years in prison and Isabel to just over three. Recent advancements in technology and IRS procedures for reviewing returns and staying on top of taxpayers' finances have made it easier for the agency to detect and prosecute tax crimes, especially in similarly egregious circumstances.

Call the Tax Law Offices of David W. Klasing at (800) 681-1295 to arrange a reduced rate initial consultation with our Dual Licensed Criminal Tax Defense Attorneys and CPAs about your case or click here.

Couple Sentenced for Fraud Scheme and Tax Evasion After IRS Criminal Tax Investigation

A married couple from Macomb County, Michigan, Noli, and Isabel Tcruz, was sentenced on September 5, 2024, for various charges related to a kickback scheme involving their home healthcare companies for homebound Medicare beneficiaries. The last of these shut down in 2020, just before the COVID-19 pandemic began. Before that happened, however, the Tcruzes generated $5.5 million from the scheme.

The Fraud Scheme

The couple was indicted soon after, in July 2020, on charges of tax evasion and healthcare fraud. The prosecution eventually proved that the couple bribed physicians with kickbacks in exchange for patient referrals to their home healthcare services for Medicare beneficiaries. The Tcruzes purported to operate these companies in several states, including Michigan, Nevada, and Arizona. In addition to giving the Tcruzes patient referrals as part of the scheme, physicians also provided the couple with patient information that led to fraudulent Medicare service.

COVID-19 Relief Fraud

As the pandemic progressed and after the last of the couple's healthcare companies closed, Noli Tcruz began engaging in separate fraudulent activity unrelated to the couple's previous kickback scheme. Operating under a family member's identity, Tcruz received more than $250,000 in pandemic assistance funds, defrauding both the Small Business Administration and the Department of Health and Human Services. This was a clear abuse of taxpayer and government funds, as COVID-19 relief was for small businesses genuinely economically affected by the pandemic.

Tax Evasion Charges

To make matters worse, the Tcruzes did not report or pay their personal or business income for several years, resulting in subsequent tax evasion charges for both spouses. The couple tried to hide their income by using business accounts and diverting funds to pay for personal expenses. They willfully avoided paying more than $6,000 in taxes, not including interest or penalties.

The Involved Physicians Who Pled Guilty

Two physicians who accepted kickbacks and bribes from the Tcruzes in exchange for referrals of Medicare beneficiaries pled guilty to charges previously, helping investigators and prosecutors solidify their case against the couple. The physicians, Dr. Terry Baul and Dr. David Calderone, were ordered to pay more than $3 million in restitution and are now excluded from engaging in Medicare or other federal healthcare programs.

The Sentencing and What It Means for Others

In total, the scheme generated over $5 million for the Tcruzes, who were ultimately convicted of charges related to their fraudulent activity and were sentenced recently, both at age 68. Noli Tcruz was given a prison sentence of six years, while his wife, Isabel, was sentenced to 38 months.

This case has several notable elements, such as the IRS' newfound tactics for investigating tax evasion and the intersection of fraud and Social Security programs, which involves scamming the taxpayers who contribute to these programs to some extent. For all filers, remaining compliant and following all reporting requirements is essential as the IRS continues to investigate and prosecute tax and financial crimes at a growing rate. This is possible with advancements in modern technology including artificial intelligence making it much easier for the IRS to identify and investigate or audit fraudulent, incorrect, incomplete, or suspicious returns.

In fiscal year 2023 alone, the IRS Criminal Investigation opened 2,676 criminal tax investigations, identifying over $37.1 billion in financial and tax crimes. Prosecuted cases had an 88.4% conviction rate, illustrating the IRS' commitment to holding criminally evasive taxpayers accountable. If the IRS does not prosecute taxpayers for criminal tax violations, it might impose civil fraud penalties, often leading taxpayers to extreme financial distress.

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Coming back into Tax Compliance Without Facing Criminal Tax Prosecution.

If you have failed to file a tax return for one or more years or have taken a position on a tax return that could not be supported upon an IRS or state tax authority audit, eggshell audit, reverse eggshell audit, or criminal tax investigation, it is in your best interest to contact an experienced tax defense attorney to determine your best route back into federal or state tax compliance without facing criminal prosecution.

Note: As long as a taxpayer that has willfully committed tax crimes (potentially including non-filed foreign information returns coupled with affirmative evasion of U.S. income tax on offshore income) self-reports the tax fraud (including a pattern of non-filed returns) through a domestic or offshore voluntary disclosure before the IRS has started an audit or criminal tax investigation / prosecution, the taxpayer can ordinarily be successfully brought back into tax compliance and receive a nearly guaranteed pass on criminal tax prosecution and simultaneously often receive a break on the civil penalties that would otherwise apply.

It is imperative that you hire an experienced and reputable criminal tax defense attorney to take you through the voluntary disclosure process. Only an Attorney has the Attorney Client Privilege and Work Product Privileges that will prevent the very professional that you hire from being potentially being forced to become a witness against you, especially where they prepared the returns that need to be amended, in a subsequent criminal tax audit, investigation or prosecution.

Moreover, only an Attorney can enter you into a voluntary disclosure without engaging in the unauthorized practice of law (a crime in itself). Only an Attorney trained in Criminal Tax Defense fully understands the risks and rewards involved in voluntary disclosures and how to protect you if you do not qualify for a voluntary disclosure.

As uniquely qualified and extensively experienced Criminal Tax Defense Tax Attorneys, Kovel CPAs and EAs, our firm provides a one stop shop to efficiently achieve the optimal and predictable results that simultaneously protect your liberty and your net worth. See our Testimonials to see what our clients have to say about us!

Regardless of your business or estate needs, the professionals at the Tax Law Offices of David W. Klasing are here for you. We are open for business and our team will help ensure that your business is too. Contact the Law Offices of David W. Klasing today to discuss your business with one of our professionals.

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