Tax Fraud Blotter: Head for the tall timber
NYC’s fanciest restaurants; ghost preparer; home detention; and other highlights of recent tax cases.
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Portland, Oregon: Christina Klauda, 53, of Riddle, Oregon, has pleaded guilty to one count of bank fraud and two counts of making and subscribing false federal income tax returns for a years-long embezzlement and tax fraud scheme that targeted her former employer.
Klauda served as the office manager and bookkeeper for Tower Timber Services, a lumber company based in Riddle, Oregon, beginning in 2014. In that role, she was responsible for payroll, accounts payable, invoicing, employee dispatch and preparation of employee tax forms.
Klauda admitted that she used her position of trust and control over the company’s financial systems to systematically steal from Tower Timber from 2014 through 2023. The government estimates the company’s losses at more than $1.08 million, while Klauda acknowledges losses of at least $944,371.97.
Klauda began the scheme by increasing her hourly and overtime rates and overstating her work hours in the company’s payroll system. Beginning in 2018, she created a second employee profile in the company’s accounting software and arranged to receive duplicate payroll payments. Klauda received one payment through direct deposit and a second payment through paper checks that she concealed by deleting records of the transactions from the accounting software.
Klauda also admitted to using the company owner’s signature stamp without authorization to issue additional checks to herself and her personal creditors. She disguised these payments as loans, reimbursements or draws, removed the transactions from company records, and failed to report the income to the IRS.
As part of the scheme, Klauda filed false federal income tax returns for tax years 2018 and 2019 by failing to report income she had stolen from the company. Specifically, she failed to report approximately $38,140 in income in 2018 and $74,144 in income in 2019, causing a total tax loss of $27,985.
The bank fraud charge carries a maximum sentence of 30 years in federal prison, a $1 million fine and five years of supervised release. Each tax fraud charge carries a maximum sentence of three years in federal prison, a $100,000 fine and one year of supervised release.
Klauda has also agreed to pay restitution to the victims. The parties estimate total restitution will be between approximately $972,356.97 and $1,111,771.56, including losses sustained by Tower Timber and the IRS.
Houston: Jamie Nevid Wallace has been ordered to federal prison for aiding or assisting in the preparation of false tax returns. Wallace pleaded guilty on March 27.
Wallace was ordered to serve 14 months in federal prison to be immediately followed by one year of supervised release. Wallace used fabricated expenses to defraud the IRS and attempted to conceal her involvement in the scheme. In handing down the sentence, the court noted Wallace’s prior federal fraud conviction in 2003, which should have served as a warning against further criminal conduct.
From 2017 to 2023, Wallace owned Donahue Tax Service and operated as a “ghost preparer” to conceal her involvement in the scheme. As such, she made it seem that clients were filing their own returns without the assistance of anyone else.
Wallace prepared false tax returns that included fraudulent Schedule A deductions and Schedule C business and education credits, which generated refunds her clients should not have received. She also charged fees for those returns.
She admitted to filing a 2021 income tax return that included $68,453 in false Schedule A deductions, $36,852 in false Schedule C losses for a business that did not exist, and a false education credit showing expenses supposedly paid to a local university. These false entries resulted in $18,075 in tax loss.
Wallace has admitted responsibility for $244,824 in losses to the IRS and has agreed to pay that amount in restitution.
Trenton, New Jersey: An East Orange, New Jersey, man has been sentenced to three years in prison for filing thousands of false Medicaid claims and receiving approximately $3.48 million in fraudulent payments from the program through a company he took over from his deceased sister.
Vicente Lopez, 64, pleaded guilty to healthcare claims fraud, Medicaid fraud and three counts of filing a fraudulent tax return. In addition to the prison term, Lopez was ordered to pay $95,000 in restitution to the state.
Lopez was the head of Joyce Lopez & Associates, which at one time provided psychological counseling services to Medicaid patients. After his sister died in 2021, Lopez took sole control of JLA.
Lopez submitted or caused to be submitted over 34,000 claims to Medicaid for psychological services and received approximately $3.48 million in connection with those claims. Neither Lopez nor JLA was an approved Medicaid provider. Lopez submitted the false claims using the name and provider number of a licensed psychiatrist without the psychiatrist’s permission or knowledge. The psychiatrist also did not provide psychotherapy services to any JLA patients. Lopez also billed Medicaid for services not rendered.
Lopez failed to pay taxes for tax years 2021, 2022 and 2023. When brought to his attention by the state, Lopez eventually filed his tax returns but failed to disclose his full income. As of June 18, 2025, Lopez had a personal net New Jersey state tax liability of $52,372 for tax years 2021 through 2023. As of that date, he also owed a combined civil fraud penalty to the State of New Jersey totaling $26,186, with an additional $21,151 in interest, totaling $99,709 in taxes, penalties and interest.
New York: Keith Taylor, 59, of New York, the founder and former CEO of Modest Needs Foundation, a charitable organization, was sentenced to eight years in prison for defrauding the charity and its donors by stealing millions in donations meant for low-income families and spending them instead on personal expenses, including rent in a luxury apartment building in midtown Manhattan and lavish meals at some of New York City’s most expensive restaurants, and evading more than a million dollars in federal income taxes.
In or about 2002, Taylor founded MNF, a charitable organization that used a crowd-sourcing funding model to help low-income workers pay for unexpected expenses like medical bills or repairs of broken appliances.
Since at least 2015, Taylor embezzled more than $2.5 million from the charity and its donors and used that money to fund his lavish personal spending. Taylor regularly dined at some of New York City’s fanciest restaurants, including Per Se, Jean-Georges, Masa and Marea, sometimes as often as twice a day, spending more than $320,000 of charity funds at New York City restaurants and steakhouses.
Funds donated to the charity paid over $300,000 of Taylor’s rent for a luxury apartment on the 30th floor of a midtown Manhattan skyscraper. Taylor also used charity funds to buy himself expensive electronics, to pay over $100,000 to food delivery services, and to pay for his own medical expenses. Taylor put over $270,000 of charity funds directly into his personal brokerage account. Taylor also routinely paid his other personal expenses from the charity’s bank accounts.
Taylor attempted to hide his embezzlement of charity funds by creating a fake board of directors and claiming it had approved his personal spending and provided oversight over the organization. Taylor used the names of his acquaintances and falsely listed them on the charity’s tax forms and website as board members.
From 2017 through 2024, Taylor did not file personal income tax returns or pay income taxes on the millions of dollars in income he received from the charity, evading more than a million dollars in federal income taxes.
In addition to prison, Taylor was sentenced to three years of supervised release and ordered to pay $3,118,237 in forfeiture and $4,144,645 in restitution.
Danbury, Connecticut: Mark Edwards, 61, of Danbury, pleaded guilty to aiding in the preparation of a false tax return. He was sentenced to two years of probation, the first six months of which Edwards must spend in home detention, for filing false tax returns. Edwards was also ordered to pay a $25,000 fine and perform 100 hours of community service.
Since approximately 1998 Edwards has owned and operated Mark Edwards Roofing and Siding, a roofing and construction business.
Beginning at least as early as 2018, Edwards failed to keep accurate records or perform bookkeeping for his business, and during the preparation of his income tax returns he provided his tax preparer with handwritten income and expense figures that substantially underreported his income. On his federal income tax returns for the 2019 through 2023 tax years, Edwards underreported his gross receipts by at least $1.3 million, resulting in a tax loss to the IRS of $368,334.
Edwards has paid restitution of $368,334 to the IRS, but he still faces substantial tax penalties and interest.
Martinsburg, West Virginia: One of two former Berkeley County Tax Office employees entered a guilty plea in federal court.
Lisa Lee French, 48, of Martinsburg, admitted that between 2007 and October 2024, she conspired to steal cash payments collected by the Sheriff’s Office and to manipulate conservatorship and estate accounts overseen by the office. French acknowledged issuing fraudulent checks, forging signatures, misusing a sheriff’s signature stamp and diverting funds for her personal benefit.
The suspicious activity had come to light in October 2024. Several checks made out from conservatorship accounts were suspicious because of the amounts involved and that frequently there were no notes in the memos.
The fraudulent scheme goes back as far as 2007, according to investigators, and continued up to its discovery in late 2024.
Lisa French was responsible for handling the conservatorship accounts. Her supervisor is alleged to have helped French with the fraud, and is awaiting trial on March 23, 2027.
French reportedly wrote checks out of conservator accounts to her business. Between 2007 through October of 2024, more than 550 fraudulent checks were written.
French also could face a maximum sentence of up to 30 years in prison followed by five years of supervised release.
French faces a fine of up to $1 million and will also be held responsible for the costs associated with her incarceration, which was as much as $4,500 a month. She is not eligible for parole.
Fresno, California: Marvin Charo Collins, 52, formerly of Elk Grove, was sentenced to three years in prison and ordered to pay $682,768 in restitution to the IRS for making a false claim against the United States.
Between 2017 and 2023, Collins filed more than 15 false tax returns with the IRS in which he reported false income and false tax withholdings and claimed millions of dollars in tax refunds. During that time, Collins falsely claimed more than $13 million in tax refunds.
As part of his scheme, Collins created fictitious entities, including the Marvin C Collins Estate, through which he filed his false tax returns. For one of the false tax returns, Collins received a refund of $682,768. Using the proceeds of his fraud scheme, Collins purchased a house, a 2016 Maserati and more than $300,000 in precious metals, including gold and silver bars.
Harrison, New York: Michelle Pennant, 48, a New Jersey resident, will spend up to three years in state prison for embezzling more than $130,000 from two former employers.
Pennant pleaded guilty to grand larceny and criminal tax fraud.
Between March 2023 and April 2024, Pennant stole more than $70,000 from the Westchester construction company where she was employed. She also stole another $62,000 from a home decorating business where she worked between April 2022 and April 2024. The businesses were not identified.
Pennant also failed to pay taxes on the money she stole.
She was sentenced to between one and a half and three years in prison. She is also required to repay the amount she stole to her former employers, as well as $5,597 to the New York State Department of Taxation and Finance.
Kansas City, Missouri: Teneika Reynolds, 50, pleaded guilty to aiding and assisting in the preparation of false tax returns.
Reynolds was the owner and operator of TR Tax Service, a tax preparation business operating in Kansas City. Reynolds prepared and electronically filed returns claiming false items including Schedule C business expenses, false Forms 7202, sick and family leave credits, and fictitious household help income for client-taxpayers for tax years 2019 through 2023. This resulted in refunds larger than what her clients were entitled to receive.
Reynolds helped at least 15 individuals file at least 33 false and fraudulent income tax returns for tax years 2019 through 2023. Specifically, on Feb. 8, 2022, Reynolds aided and assisted in the filing of an income tax return. On that form, Reynolds included false sick and family leave credits, resulting in a fraudulent refund.
Reynolds is subject to a sentence of up to three years in federal prison without parole.
