Chat with an FTB Representative

Tax News
 Criminal Corner

We are committed to closing California’s $6.5 billion tax gap, defined as the difference between tax that is owed and tax that is paid. Our special agents work cooperatively with law enforcement agencies throughout California to uncover illegal behaviors that contribute to the tax gap. These behaviors include underreporting income, overstating deductions, failing to file returns, failing to pay taxes due, and making illegal cash payments to employees.

Tax fraud is not a victimless crime. You can report suspected tax fraud by calling FTB at 800.540.3453.

Encino executive arrested for state income tax evasion

An Encino man was arrested on three felony counts of personal income tax evasion and one felony count of corporate tax evasion.

Stanley Azrilyan, 34, is listed in Secretary of State records as the sole corporate officer of Bio-Pharmaceutical Industries (BPI), Inc. According to FTB investigators, BPI, Inc. allegedly had gross income of more than $10.3 million in 2004, and failed to file its corporate tax return for that year. In addition, Azrilyan allegedly received compensation of more than $2.6 million from his corporation for the years 2003 to 2005 and failed to file his personal income tax returns for these same years. The corporation owes more than $863,000 in corporate tax and Azrilyan owes more than $240,000 in personal income tax. Penalties, interest, and the cost of the investigation will be added to these amounts.

This is a joint investigation between the Los Angeles County District Attorney's Fraud Interdiction Program and FTB.

Orland woman sentenced for state income tax evasion and embezzlement

An Orland woman was sentenced to six years and four months in state prison on felony charges of embezzlement and state income tax evasion.

Jennifer M. Sites, 38, was employed as a bookkeeper by a Chico-based industrial equipment company. According to court documents, Sites abused her position of trust with the firm by embezzling more than $500,000 from her former employer during 2006 and 2007. In addition, Sites and her husband, Bryon J. Sites, 43, failed to file state income tax returns for these same years claiming their income and the embezzled funds. Byron Sites was sentenced to probation on misdemeanor state income tax evasion charges. All income is taxable including income from illegal sources.

Sites was ordered to pay restitution of $581,907 to her former employer, and more than $73,400 to FTB representing the unpaid tax, penalties, interest, and the cost of the investigation.

Los Angeles woman sentenced to prison on misappropriation of public funds, state income tax fraud

A former Los Angeles County employee was sentenced to three years in state prison and ordered to pay full restitution to her victims.

Josefina C. Belleza, 58, pleaded guilty in February to two counts of misappropriation of public funds and one count of filing a fraudulent state income tax return. According to court documents, Belleza conspired with Evelyn Tyson, 59, of Altadena, to defraud Los Angeles County out of more than $557,500 between 2001 and 2007. Tyson was the owner of Tyson's Day Care Services, formerly known as Tyson's Family Day Care. Tyson submitted fraudulent claims to the county for childcare services not rendered, which were approved by Belleza, a former Eligibility Supervisor. The scheme was discovered through an anonymous call to the Los Angeles County Fraud Hotline. In addition, Belleza failed to claim the illegal income on her state income tax returns.

Belleza was ordered to pay Los Angeles County full restitution of the embezzled funds and pay FTB $44,123 representing the unpaid tax, interest, penalties, and the cost of the investigation. The court has ordered the sale of Belleza's home to pay the restitution.

Tyson was sentenced in June to 16 months in prison for her role in the fraud scheme and ordered to pay FTB restitution of $33,047.

This was a joint investigation between the Los Angeles County District Attorney's Office and FTB.

San Jose tax preparers sentenced for tax fraud

A San Jose-based tax preparer and his assistant were sentenced to county jail for aiding and abetting his clients to file fraudulent state income tax returns.

Jeff R. Welch, 62, of Gilroy, owned and operated Accountable Financial Services with Joy Ramoran, 32, of San Francisco, employed as his assistant. Welch was sentenced to four months in county jail and Ramoran was sentenced to 60 days. In addition, both were ordered to pay FTB restitution of more than $90,200. As part of his three-year probation, Welch was also ordered to not assist in the preparation of tax returns on behalf of his clients.

According to court documents, between 2000 and 2004, the pair prepared and filed false tax returns that claimed fraudulent or fraudulently inflated Child and Dependent Care Credit Expenses. The false credits generated increased refunds on behalf of their clients. In one instance, Welch electronically filed a client’s return and claimed the head of household filing status with one dependent. In reality, the client was married with two children neither of whom was in daycare. Welch and Ramoran benefited from an increase in the number of clients and from charging fees for form preparations that were not required.

This case was discovered by FTB’s internal fraud detection program.