Former IRS Agent & Tax Preparer Orders Hit on Former Clients

Former IRS Agent & Tax Preparer Orders Hit on Former Clients

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Fox News reports that a former IRS agent whose tax preparation business catered to a wealthy  clientele is accused of ordering at least two former customers killed as they  prepared to testify against him on fraud charges:

Federal prosecutors say the targets were key witnesses against Steven Martinez, 50, who was charged last year with stealing  $11 million by preparing bogus tax returns for his customers.

Martinez’s limousine driver — Norman Russell  Thellmann, 64 — was charged Monday with conspiracy to tamper with witnesses.  Prosecutors allege he was ordered to deliver money to a hit man who was promised $100,000 for the two killings.

Martinez did not enter a plea during his initial  court appearance Monday on a charge of witness tampering. A federal magistrate  judge ordered him held without bail.

“I find it almost impossible to believe,” said David  Demergian, his attorney.

Martinez, an IRS agent from 1988 to 1992, faces a  pretrial hearing March 19 on federal fraud charges and was free on bail until his arrest last week. An FBI agent’s affidavit says Martinez gave a former employee documents on four people about two weeks ago, including photos of one target from the wealthy suburb of  Rancho Santa Fe and another target’s condominium in the upscale La Jolla area of  San Diego.

Martinez recommended the former employee use two  different pistols for the killings and get a silencer, according to the  affidavit. The former employee contacted the FBI, which recorded a meeting Thursday in which Martinez allegedly gave additional instructions on how to break into the La Jolla condominium.

The targets were identified as 86-year-old Monique Siegel of La Jolla and Marianne Harmon of Rancho Santa Fe.

The fraud complaint alleges that Martinez told  customers to deposit their taxes into one of his bank accounts, promising to  forward the money to state and federal authorities. He stated lower income on their tax returns without telling them, allowing him to pocket $11 million.

The complaint identifies victims only by their  initials. One “M.H.” had an income of $20.7 million in 2006 but Martinez filed a  tax return for $2.1 million. One “M.S.” earned $200,046 in 2006 but Martinez’s return reported $32,900.

Another customer who earned $12.2 million in 2005  reported income at $1.6 million, according to the complaint. The same customer earned $11 million in 2006, also reported as $1.6 million.

Demergian, his attorney, said the fraud case was “certainly very defensible.”

“He had a very dedicated loyal clientele,” Demergian said. “He was very successful.”

Thellmann, who was arrested Friday night, told the  FBI that Martinez sold him a limousine about three years ago and hired him as a chauffeur. He said Martinez told him to give $40,000 to a person who would call him with code.

Thellmann denied he knew the money was to pay a  hitman. FBI agents found $42,400 cash in a cereal box at his home.

The only fact that could make this story crazier would be if the cereal the feds found the loot in was Lucky Charms.

Did this zopenco Martinez really think that two key witnesses of his would turn up dead and the government would just drop its case against him? This guy is nuttier than the Alternative Minimum Tax.

By the way, where the hell did he find all of these mega-wealthy clients? I guess the world will beat a path to your door if you build a bigger refund.

About Peter Pappas

Peter is a tax attorney and certified public acccountant with over 20 years experience helping taxpayers resolve their IRS and state tax problems.

He has represented thousands of taxpayers who have been experiencing difficulty dealing with the Internal Revenue Service or State tax officials.

He is a member of the American Association of Attorney-Certified Public Accountants, the Florida Bar Association and The Florida Institute of Certified Public Accountants and is admitted to practice before the United States Tax Court, the United States Supreme Court, U.S. District Courts - Middle District of Florida