Citation: United States v. Samuel J. DeAngelo et al.; No. 8:03-cv-00251
Full Text:
Aug. 26, 2008
UNITED STATES OF AMERICA,
Plaintiff,
v.
SAMUEL J. DeANGELO; JOE GORDON SHIELDS, A/K/A GORDON SHIELDS;
ALAN M. HOVEY; JEFFREY R. WRIGHT; KELLY DAVID, A/K/A
DAVID KELLY; AND WESTERN TAX SERVICE, INC.,
Defendants.
1. The Court has jurisdiction over this action under 28 U.S.C. §§ 1340 and 1345 and 26 U.S.C. §§ 7402 and 7407.
2. On March 11, 2003, the United States commenced this action seeking to enjoin Wright and the other defendants permanently from acting as income tax return preparers and from engaging in conduct subject to penalty under I.R.C. Section 6694, "Understatement of Taxpayer's Liability by Income Tax Return Preparer."
3. The complaint alleged in material part that the defendants continually or repeatedly engaged in such conduct, understating the tax due (and overstating the refunds due) on customers' federal income tax returns by claiming false and inflated itemized deductions for charitable contributions and employee business expenses.
4. On July 30, 2003, the Court preliminarily enjoined the defendants (except for defendant Joe Gordon Shields, who previously entered into a permanent injunction by consent) from engaging in any conduct prohibited by I.R.C. Section 6694, including but not limited to overstating the allowable amount of charitable contributions and/or employee business expenses on the returns they prepared for compensation.
5. On April 14, 2004, the defendants herein, along with others, were indicted on related criminal charges in United States v. Samuel Joseph DeAngelo, et al., No. SA CR 04-68(A)-JVS.
6. On September 25, 2005, Wright entered into a Plea Agreement in the criminal case. He received a sentence of six months in a judgment entered October 1, 2007.
7. Wright has not been in the business of preparing income tax returns since well before he entered into his Plea Agreement. He has no intention of ever again preparing income tax returns for compensation.
8. To resolve the claims against him in the instant proceeding, Wright agrees to be bound by the terms set forth in the following paragraphs.
9. Pursuant to I.R.C. Section 7407(b) and I.R.C. Section 7402(a), Wright, along with any agents, servants, employees, attorneys, or other persons in active concert or participation with him, is HEREBY PERMANENTLY ENJOINED from:
b. Engaging in any conduct subject to penalty under I.R.C. Section 6694, including but not limited to preparing tax returns or claims for refund that overstate the allowable amount of charitable contributions and/or employee business expenses; and
b. Engaging in any other conduct that interferes with the proper administration and enforcement of the internal revenue laws.
11. The parties hereto shall bear their respective costs, including any possible attorneys' fees or other expenses of this litigation.
DATED: August 26, 2008.