April 19, 2005
Criminal Justice Investigation Results in Arrest of Essex County Tax Preparer on Charges of Filing Hundreds of False Tax Returns &
Stealing Thousands of $$$ in Illegal Refunds
Attorney General and State Treasurer Establish Hotlines To Report
Tax Cheats & Corruption...
Citizens Against Tax Cheats @ (609) 292-6400 & 1-866-TIPS-4CJ
TRENTON —Attorney General Peter C. Harvey today announced that a joint-agency tax fraud investigation targeting the theft of thousands of dollars from the state treasury has resulted in the arrest of an Essex County tax preparer on charges of filing hundreds of false or fraudulent New Jersey State Income Tax Returns which resulted in unentitled refunds being issued in the names of fictitious “taxpayers.” The ongoing investigation has uncovered the filing of nearly 300 fraudulent New Jersey tax returns seeking over $195,000 in illegal refunds.
“This investigation uncovered a deliberate and blatant attempt to steal tens of thousands of dollars from the state treasury through the filing of hundreds of false or fraudulent tax returns. The prosecution of this defendant demonstrates the resolve and forward thinking by the Division of Criminal Justice and the Division of Taxation as they undertake concerted efforts to target those who attempt to steal or cheat the treasury,” said Attorney General Harvey. “Make no mistake, we intend to recover tax dollars owed to both the state treasury and to New Jersey’s honest taxpayers.”
Treasurer John E. McCormac noted that this violator attempted to abuse, for his personal gain, a tax refund program which had been established to assist the working poor, and that such offenses, committed during a period of significant budgetary pressures, “victimize all New Jersey citizens.”
Vaughn L. McKoy, Director, Division of Criminal Justice and Robert K. Thompson, Director, Division of Taxation, said that Ramoni Mustapha, 50, 221, Custer Ave., Newark, Essex County, was arrested and charged via a criminal complaint with theft by deception and filing and/or preparing false or fraudulent tax returns. Mustapha, a self-employed tax preparer and the owner/operator of Ramsalam Business and Tax Consultancy located at 103-105 South Day St., Orange, Essex County, was arrested on April 15 at his Orange business location by State Investigators from the Division of Criminal Justice - Financial Crimes Bureau and tax agents from the Division of Taxation’s Office of Criminal Investigations.
Criminal Justice Director McKoy noted that in conjunction with Mustapha’s arrest, the state law enforcement agents conducted a search of Mustapha’s office pursuant to a court authorized search warrant issued by Mercer County Superior Court Judge Charles A. Delehey. As a result of the search warrant, State Investigators confiscated and seized tax returns, various tax documents and records, computer systems, false/fraudulent credit cards and identification documents, and related evidence. Mustapha has been released from the Mercer County Jail after posting $100,000 bail. An arraignment hearing will be scheduled. The second degree charges each carry a maximum penalty of up to ten years in state prison and a fine of up to $150,000 upon conviction.
The criminal complaint alleges that Mustapha filed at least 293 fictitious and/or fraudulent resident New Jersey State Income Tax returns for the tax years 2001 and 2002. The Division of Taxation determined that the purported fraudulent returns were filed during 2004 and 2005 and that $194,693 in Earned Income Tax Credit (EITC) refund checks were issued. It is alleged that Mustapha prepared and filed the fraudulent state income tax returns based on false identifying information which qualified the “taxpayer” for an unentitled refund of up to $725.00 using the EITC. The EITC gives taxpayers a New Jersey refund based on the percentage of money refunded on the federal tax return. In order to claim the EITC, individuals must meet certain criteria, including filing a federal EITC, have at least one qualifying child listed on the Federal EITC Schedule, have New Jersey gross income of $20,000 or less, and have the same filing status on both the state and federal tax returns.
Director Thompson commended the Division of Criminal Justice for immediately mobilizing its resources to quickly obtain the necessary search and arrest warrants after discovery of the scheme by the Division of Taxation’s forensic auditors.
“With the arrest and filing of criminal charges against Mustapha, the alleged illegal tax preparation operation has been effectively shut-down,” said Criminal Justice Director McKoy. “The investigation will be presented to a State Grand Jury for possible indictment.”
Chief Investigator Sue Kane of the Division of Taxation - Office of Criminal Investigation and State Investigator Eric Ludwick of the Division of Criminal Justice - Financial Crimes Bureau coordinated the investigation. Supervising Deputy Attorney General Terrence Hull and Deputy Attorney Denise Grugan of the Division of Criminal Justice - Financial Crimes Bureau along with Assistant Chief Rich Mawer and Assistant Chief Bob Morris of the Division of Taxation’s Office of Criminal Investigation, conducted the investigation.
Director Thompson noted that anyone with information about unscrupulous tax preparers, or any type of tax fraud, are encouraged to contact the New Jersey Division of Taxation’s “Citizens Against Tax Cheats or CATCH” program. The hotline number is: (609) 292 6400. Information can also be mailed to the New Jersey Division of Taxation, 50 Barrack Street, P.O. Box 190, Trenton, NJ 08695 0190, Attention: Citizens Against Tax Cheats.
In announcing the criminal investigation, Director McKoy noted that the Division of Criminal Justice has established a toll-free “Corruption TipLine” at 1-866-TIPS-4CJ for the public to report corruption, financial crime, and other illegal activities. Any information received via the Division of Criminal Justice “Corruption TipLine” or the Division of Taxation “CATCH Hotline” will remain confidential.
Additional information is available via the Division of Criminal Justice
Web Page @ www.njdcj.org.