Tax preparer pleads guilty in $1.6 million tax fraud

Friday, January 22, 2016

A Champlin tax preparer pleaded guilty to 17 counts of preparing fraudulent taxes and failing to pay her own taxes, Hennepin County Attorney Mike Freeman announced Friday.

Rona Griffin, 52, is expected to receive nearly four years in prison when she is sentenced March 28. Griffin not only admitted to her crimes, but also admitted a number of aggravating circumstances that will allow the judge to sentence her to 46 months in prison instead of the 23 months she normally could have expected.

“We are satisfied that Ms. Griffin finally understood the damage she did to her clients and how wrong she was to cheat the state of Minnesota,” Freeman said. “Investigators from the Minnesota Department of Revenue and our prosecutors compiled such a strong case that she realized she could not win.”

“This time of year, thousands of Minnesotans entrust their personal information and their money to tax preparers,’’ said Revenue Commissioner Cynthia Bauerly. “We work to ensure everyone, including tax preparers, follows tax laws—a role we take very seriously. Taxpayers trust they are receiving fair representation from their tax preparer. Intentional abuse of that trust by the preparer has consequences.”

Almost a year ago, Griffin was charged with 53 felonies. In Friday’s court appearance, Assistant Hennepin County Attorney Morgan Kunz told Hennepin County District Court Judge Susan Burke that instead of going to trial Monday, Griffin agreed to plead guilty to the 17 counts and the state would drop the other 36 counts. Further, the state will seek restitution at sentencing, in an amount to be determined, but her unpaid taxes alone come to $117,000, Kunz said.

Through her fraud, Griffin was accused of costing the state more than $1.6 million in tax revenue between 2009 and 2013.

In pleading guilty to nine charges of preparing fraudulent tax returns for nine of her clients and failing to pay her personal income taxes and the taxes for her company HAH Broker, Inc., Griffin admitted to a number of aggravating circumstances. They included that the scheme required a higher level of sophistication, she abused a position of trust, that she forged church and mileage documents to cover up the fraud and sent a letter to the Department of Revenue stating that her only income was from child support and social security.

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, revenue department investigators learned that Griffin 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 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.

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, the complaint states and Friday she admitted to forging those document.

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 court Friday, Griffin said nothing other than to answer questions from her lawyer and the judge with a yes or no. She acknowledged that if she stood trial and was convicted on all charges, the Minnesota Sentencing Guidelines recommendation could be a sentence of up to 68 months in prison.