DA: $1.1 Million Tax Refund Fraud Scheme Lands Accountant, Her Family and Male Model Client in Jail

The tax man comes for everyone. Seems like the Queens District Attorney does so as well. While the New York taxing authorities take their payment in money, District Attorney’s Offices seek not just your money, but your freedom as well. Unfortunately for Diana Rabin, an accountant, her mother Lyidmila Levy, sister Alisa Derabin and clients Merced R. Baumer and Nyemah Johnson, they are now facing up to fifteen years in state prison for allegedly attempting to obtain a combined $1.1 million in New York State tax refunds.

Not only are the defendants alleged to have claimed hundreds of thousands of dollars in income, but tens of thousands of dollars in taxes withheld from this purported income. According to the District Attorney’s Office, this income was made up as some of the defendants did not even work.

According to the Queens District Attorney website:

“Rabin attempted to collect more than $1.1 million in state tax refunds between March 2008 and June 2010 for herself and the four other defendants whose returns she had prepared and who, in fact, did unlawfully receive and retain a total of approximately $275,581 before the state Tax Department discovered the fraud and put a halt to other refunds.

In carrying out the alleged scheme, Rabin is accused of fraudulently preparing and filing tax returns for herself and the other defendants that claimed each had earned exorbitant amounts of fictitious income from employees. For example, it is alleged that Rabin and her mother listed employers on their returns who had previously fired them, Baumer and Johnson listed employers for whom they had never worked (but had previously employed and fired Rabin), and that Derabin exaggerated the per diem wages that she earned as a nurse from a home care agency. It is further alleged that during state Tax Department audits of the defendants’ tax returns all but Baumer filed forged memoranda that purported to have been issued by their “employers” and repeated the false statements about the wages they had earned and the taxes withheld.

In total, it is alleged that the five defendants claimed a total of $2,639,088 in fictitious wages for the tax years 2007, 2008 and 2009 and tax refunds totaling $1,103,846 when, in fact, they were only entitled to a total of $13,123 in tax refunds if all the other information on their returns were correct.”

The defendants are charged, not indicted, on the following crimes:

Attempted Grand Larceny in the First Degree (a “C” felony), Grand Larceny in the Second and Third Degrees (a “C” and “D” felony respectively), Criminal Possession of Stolen Property in the Second and Third Degrees (a “C” and “D” felony respectively), Forgery and Criminal Possession of a Forged Instrument in the Second Degrees (both “D” felonies), Falsifying Business Records and Offering a False Instrument for Filing in the First Degrees (both “E” felonies) and other crimes relating to Conspiracy and New York Criminal Tax Fraud. For first time offenders, a “C” felony is punishable by up to fife to fifteen years in state prison, a “D” felony is punishable by up to two and one third to seven years in state prison and an “E” felony is punishable by up to one and one third to four years in state prison.

For further information, including definitions, case law and other materials, please follow the highlighted link for each crime or review the applicable sections of Crotty Saland’s New York Criminal Law Blog at NewYorkCriminalLawyerBlog.Com.

Crotty Saland PC is a New York criminal defense firm representing clients throughout the New York City region. Prior to starting the firm, the founding members served as prosecutors in the Manhattan District Attorney’s Office under Robert Morgenthau.

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