Tax preparer charged in scheme that cheated state out of $1.7 million

Thursday, February 05, 2015

A Minneapolis woman has been charged with 53 felonies for filing false income tax statements on behalf of her clients and failing to file taxes on her own income and business, the Commissioner of Revenue and the Hennepin County Attorney announced today.

All told, Rona Estelle Griffin, 51, is charged with costing the state of Minnesota more than $1.4 million in tax revenue between 2009 and 2013. 

"Taxpayers entrust preparers with personal information and their money," said Revenue Commissioner Cynthia Bauerly. "We work to ensure everyone, including tax preparers, follows tax laws and we take our role very seriously. Taypayers looking for help in choosing a reputable preparer can find great tips on our website."  

Hennepin County Attorney Mike Freeman said the criminal complaint was issued through a summons and a first appearance will be scheduled soon.

"This is the largest tax fraud case, we believe, filed by this office in its history," Freeman said. "This is the result of brazen cheating. Ten people are reflected in the complaint who were cheated and many more, we believe, were cheated. This is the result of some superb work by Department of Revenue investigators."

According to the criminal complaint, Griffin started her own business HAH Broker, Inc. out of her home in Champlin before moving to Minneapolis. Her business does tax preparation and accounting. But the investigation by the revenue department determined she had hundreds of individual and business clients and made false statements on most of their tax filings.

In talking to a number of the individuals who went to Griffin for tax preparation, she consistently lied about their charitable contributions and about business expenses that were not reimbursed, the complaint states.
Many of her clients contributed nothing or just a few hundred dollars to charity. Griffin would report on their income tax forms that they contributed 10 percent of their income to charities, often to churches they never had attended.

Griffin also would change her client’s occupation. For instance, one client worked as a forklift operator in a warehouse. She changed that to sales representative and indicated that he had more than $10,000 in unreimbursed employee expenses in the form of mileage, travel and other business expenses, according to the complaint.

"They paid to have a proper return prepared and what they got was junk," Freeman said. When her clients began receiving letters from the department that they would be audited, Griffin invited them to a meeting at her home in March 2013. She told a number of them to buy ledgers and create mileage reports to support their travel deduction. She also asked all of them to make her power of attorney over their cases, the complaint states.

Griffin’s company was quite profitable in the years between 2008 and 2013. Yet, in 2010, 2011, 2012 and 2013 she filed no tax returns for her HAH Broker business, and only one individual tax return. That one, in 2013, was false, showing a federally adjusted gross income of $9,237 when the Department of Revenue audit found that she made more than $150,000, according to the complaint.

In 2009, when a tax return was filed for HAH Broker, it dramatically understated the company’s profits. The form was signed by Griffin’s daughter, indicating she had prepared the tax return.  However, the investigation found that her daughter had not prepared the return and her signature was forged, the complaint states.

Read the full criminal complaint (PDF).

Watch the press conference (link to YouTube).