Insult to injury; lack of progress; gone fishing; and other highlights of recent tax cases.

Los Angeles: Christopher Kazuo Kamon, former longtime head of the accounting department at a now-shuttered personal injury law firm, has been sentenced to 10 years and a month in prison for enabling the embezzlement of millions of dollars from the firm’s clients and for embezzling money from the firm itself.

Kamon, formerly of Encino and Palos Verdes, California, and who was residing in the Bahamas at the time of his November 2022 arrest, was also ordered to pay $8,903,324 in restitution. He pleaded guilty in October.

From 2004 until December 2020, Kamon was the head of the accounting department at the law firm Girardi Keese. He worked closely with co-defendant Thomas Vincent Girardi as well as other senior lawyers at the law firm.

In December 2020, Girardi Keese’s creditors forced the firm into bankruptcy proceedings. The firm dissolved in January 2021 and the State Bar of California disbarred Girardi in July 2022. Girardi has since been found guilty of four counts of wire fraud; he awaits sentencing.

Akron, Ohio: Businessman Michael Roberts, 38, of Mentor, Ohio, has been convicted of not paying federal employment taxes.

He was the executive director and co-owner of Progressive Alternatives, an in-home care business that served individuals with developmental disabilities. The business was initially purchased by Roberts’s spouse, Larry Keith Gildersleeve III, 43, also of Mentor, in February 2011. Eventually Roberts assumed responsibility for the payroll and day-to-day financial operations and assumed the title of co-owner in 2014.

Investigators found that Progressive’s records showed that payroll checks issued by Roberts reflected appropriate withholdings; the withholdings were also reflected on W-2s the employees received, but it was also discovered that Progressive never filed W-2s for employees nor submitted 941s with quarterly payments.

In late 2017, an employee who was preparing to retire was informed by the Social Security Administration that Progressive had not paid over payroll taxes to the IRS. Although Roberts was made aware of this and taxes were withheld from employee paychecks, he did not submit payments to the IRS.

Roberts was determined to be guilty of not paying taxes for quarters ending Dec. 31, 2017, and March 31, 2018, for a total of $226,687.25. Gildersleeve pleaded guilty in October to eight counts of failure to account for and pay over taxes, including the two quarters for which Roberts was also found guilty. Gildersleeve’s remaining counts included two quarters in 2018 and three in 2019 for a total unpaid of $466,280.25.

Roberts will be sentenced on July 17, when he will face up to 10 years in prison. Gildersleeve, scheduled to be sentenced in April, faced up to 40 years.

Houston: Joseph Patrick Butler has admitted to fraudulent and false statements on his federal returns.

He admitted that between 2013 to 2020 he filed false joint 1040s and received inflated refunds. Butler acknowledged creating shell companies that issued W-2s to himself, falsely reporting hundreds of thousands of dollars in wages and significant withholdings each year. In reality, he earned no such wages, and no taxes had been withheld.

Butler’s scheme resulted in a tax loss exceeding $260,000 in fraudulent refunds.

Sentencing is July 18. Butler faces up to three years in prison and a possible $250,000 fine.

El Paso, Texas: Businessman Edward Dean La Puma has been sentenced to 18 months in prison for failure to account for and pay over trust fund taxes.

La Puma was founder and sole proprietor of 77 Stone, a granite countertop business, and failed to account for and pay over trust fund taxes for 20 tax periods, from the first quarter of 2018 through the last quarter of 2022. The tax loss was $818,096.

La Puma was indicted for 20 counts a year ago and pleaded guilty to one count in November. He agreed to pay $383,551 in restitution to the IRS.

Miami: Businessman Paul Walczak has been sentenced to 18 months in prison and two years of supervised release for failing to pay over employment taxes and failing to file individual income tax returns.

Walczak controlled a network of interconnected health care companies operating under various names, including Palm Health Partners. Through another of his entities, Palm Health Partners Employment Services, he employed more than 600 people and paid more than $24 million annually in payroll. In 2011, Walczak did not pay two quarters of withheld taxes to the IRS.

The next year, the IRS began collection efforts, including by sending Walczak notices about his unpaid taxes and by meeting with him. When that was unsuccessful, the IRS assessed the outstanding taxes against him personally. Walczak paid the assessments in October 2014, but by the end of the following year he was again withholding taxes from employees’ paychecks and keeping the money; from 2016 through 2019, Walczak withheld $7,432,223.80 of taxes but did not pay the money over to the IRS.

He used more than $1 million from his businesses to buy a yacht, transferred hundreds of thousands of dollars to his personal bank accounts and used the business accounts for personal purchases at retailers such as Bergdorf Goodman, Cartier and Saks. During this time, he also did not pay $3,480,111 of his business’ portion of his employees’ Social Security and Medicare taxes.

By 2019, the IRS had assessed millions of dollars in civil penalties against Walczak. Beginning with the 2018 tax year, he also stopped filing personal income tax returns despite still receiving more than $800,000 in income. That year, Walczak created a new business, NextEra, using a family member as the nominal owner but retaining control of the company’s finances and operations.

Through NextEra, Walczak transferred in 2020 almost $200,000 to a bank account titled in a family member’s name, more than $250,000 to an account in his wife’s name and more than $800,000 in payments directly to third parties for Walczak’s personal expenses, including clothing stores, department stores and fishing retailers.

Walczak, who caused a total federal tax loss of $10,912,334.80, was also ordered to pay $4,381,265.76 in restitution to the United States.

San Antonio: Tax preparer Sandy Gonzalez, 44, of Von Ormy, Texas, has been sentenced to two years in prison for aiding or assisting the filing of a false return.

Gonzalez operated at least two tax prep services, SV Tax and JNC Tax Professionals, from Jan. 1, 2018, and April 15, 2021. During that time, Gonzalez prepared 1040s for clients that she knew contained false and fraudulent information. Primarily, she reduced the amount of clients’ reportable income by deducting losses on Schedule C for businesses that were either inflated or did not exist.

She was indicted for 10 counts a year ago and pleaded guilty to one count in December 2024.

She was also ordered to pay $297,777 in restitution.

Miami: A U.S. district court has issued an injunction against tax preparer Nia Daniel that bars her from preparing returns for others, having an ownership stake in any tax prep firm, or assisting or training others in tax prep through at least Jan. 27, 2028.

The complaint alleged that Daniel understated clients’ tax liability and claimed inflated refunds largely by falsifying or overstating business expenses; claiming the Work Opportunity Tax Credit for clients who did not qualify; falsely claiming other credits, such as the American Opportunity Credit and Residential Energy Credit; and falsifying income and filing status to inflate the Earned Income Tax Credit.

According to the complaint, the IRS estimated a tax loss of more than $500,000 in 2023 alone from returns prepared by Daniel.

The court also ordered Daniel to disgorge $446,000 she’d received from her tax prep business. Daniel agreed to both the injunction and the disgorgement.

Public Company Accounting Oversight Board chair Erica Williams told Accounting Today that the role played by the PCAOB can’t simply be “cut and pasted” into the Securities and Exchange Commission after the House Financial Services Committee approved legislation that would effectively shutter the PCAOB.

Speaking on the sidelines of Baruch College’s annual financial reporting conference in New York on Thursday, the day after Republicans on the committee voted Wednesday night to advance the bill, Williams declined to speculate on what would happen in the event of a transition of the PCAOB’s duties to the SEC. “I will say that I think that investors are better protected basically because of the PCAOB, and I also think that audit expertise and talent of our staff cannot be cut and pasted for investors, especially at this time of market volatility,” she said in an interview. “I think that the expertise of our staff is unmatched and irreplaceable.”

She noted that the PCAOB has provided technical assistance to the committee’s ranking member Rep. Maxine Waters, D-California, and would be happy to provide any additional technical assistance.Williams pointed to the agreements the PCAOB has with audit regulators around the world to do inspections, and its hard-won efforts to secure access to inspect auditing firms in China. She noted during a speech Wednesday at a meeting of the PCAOB’s Investor Advisory Group that those agreements are not automatically transferable to the SEC and they only came after passage of the Holding Foreign Companies Accountable Act of 2020. She was asked whether the SEC would be able to renegotiate the PCAOB’s agreement with Chinese authorities, given the rocky state of relations now between the U.S. and China.

“I don’t know if they’d be able to renegotiate it, but in order to be able to inspect and investigate completely there, as required by the HFCAA, they would need to have a new statement of protocol,” Williams replied. “History tells us that in times when the economy is tight, this is what companies do, so if there is a period of time when no one is watching, that’s when investors will be put at risk.”

The SEC is taking a friendlier stance toward the cryptocurrency industry, setting up a Crypto Task Force in January, while retreating from former chair Gary Gensler’s crackdown on the crypto industry under newly confirmed SEC chair Paul Atkins. Several auditing firms that had been doing so-called “proof of reserve” audits have stopped providing such services after advisories from the SEC and PCAOB. 

Williams was asked about enforcement of audits of crypto companies.

“To the extent that companies are public companies with investors, we absolutely have been focused on the inspections of public companies who have involvement in cryptocurrency,” Williams replied. “That’s one of the areas of focus in our inspection reports, and we also have staff that are really expert in that area and happy to provide that expertise out there. But in general, what I can say is our staff is the most talented, dedicated, qualified folks. I worked with the SEC for more than 11 years. They are very expert in what they do and very different in what they do.”

She was asked about the possibility of people from the PCAOB being transferred over to the SEC.

“I think they would need to take on hundreds of new staff who have the qualifications to do these types of inspections that we do,” said Williams. “Every single member of the PCAOB that was critical to us being able to deliver on our investor protection.”

She pointed out there is currently a shortage of accountants. Williams was also asked about the standards that are currently on hold at the PCAOB, such as firm and engagement metrics, firm reporting, and noncompliance with laws and regulations, or NOCLAR. 

“I can’t speculate on what might happen with the standards, but of course, in order for our standards to be implemented, they have to be approved by the SEC, so we want to make sure we’re aligned, and I need to have a discussion with Chairman Atkins, which I anticipate will happen to make sure that we’re aligned in those areas,” she said.

Asked about the possibility of the PCAOB operating as a subsidiary of the SEC, Williams replied, “That would be up to Congress.”

The legislation is expected to become part of the massive tax and budget reconciliation bill that is currently working its way through Congress, and would take effect in a year after enactment. Williams was asked about the possibility of alterations in the bill before it’s passed, but she declined to speculate on what might happen. “There’s a lot of uncertainty and a lot of questions that need to be answered,” she noted.

The proposal to fold the PCAOB into the SEC was among the ideas that were part of the Heritage Foundation’s Project 2025 plans for the Trump administration, but the legislation seemed to emerge just in the last few days and took many observers by surprise at how quickly it moved. Williams was asked if she had much advance warning about the bill. 

“We weren’t asked about technical assistance,” she replied. “But what I can say is, our work protecting investors doesn’t stop. So we have inspectors all around the world conducting inspections. We have people who are doing enforcement investigations. We have folks who are helping to make sure that firms are prepared to implement our standards, quality control and others. So our work and our focus is really on our mission, and that’s what we’re continuing here. “

Williams also touched on Wednesday night’s vote during her speech at the Baruch College conference. 

“I am deeply troubled by legislation passed by the House Financial Services Committee that proposes to eliminate the PCAOB as we know it,” she said. “The integrity of our markets is not inevitable. It takes vigilance to guard against negligence, recklessness, and fraud that threaten our system and the people who depend on it. The PCAOB plays a vital role in that effort — a role our talented and dedicated staff have developed over decades, building unique experience and expertise that cannot be simply cut and pasted elsewhere without significant risk to investors at a time when markets are already volatile, and investors have so much to lose.”

On an earlier panel featuring officials from the Securities and Exchange Commission and the Financial Accounting Standards Board, moderator Norman Strauss of Baruch College’s Zicklin School of Business asked about the impact of the legislation. SEC acting chief accountant Ryan Wolfe declined to comment specifically on the legislation other than to say he was aware of it, but added, “What I can say, with respect to the FASB issue, is just re-emphasizing the importance of an independent standard-setter. … We’re interested in supporting that in any way that we can. It’s obviously critical to the financial reporting ecosystem.”

“We’ve been around for a little over 50 years, and one thing I think we’ve certainly benefited from is we have a pretty narrowly focused mission: it’s financial accounting,” said FASB chair Richard Jones. “But while independent standard-setting is important, I sometimes worry about that term, because independence doesn’t mean us being unaccountable. We’re accountable to our stakeholders, and we earn the right to set standards by the standards we set.”

Savant Wealth Management acquired registered investment advisor Corrigan Financial, based in Middletown, Rhode Island, on April 30. 

This deal expands Savant’s geographic footprint to 44 offices in 19 states. Terms of the deal were not disclosed.

Savant is a CPA-led, fee-only RIA based in Rockford, Illinois. It has 537 employees and is No. 1 on Accounting Today‘s Top 150 Firms by Assets Under Management list with $29.6 billion in AUM and $1.2 billion in assets under advisement as of March 31. It offers investment management, financial planning, retirement plans and family office services to financially established individuals and institutions, as well as corporate accounting, tax preparation, payroll and consulting through its affiliate Savant Tax & Consulting, and estate planning document preparation and other legal services through its affiliated law firm, Savant Legal.

“The Corrigan team shares our values, particularly in the area of lifelong learning,” Brent Brodeski, a CPA, founder and CEO of Savant, said in a statement. “It’s important to note that the majority of Corrigan’s financial planners hold the CPA license, given the importance of integrating tax planning into clients’ financial plans and the current nationwide shortage of CPAs. In addition, Corrigan takes a like-minded approach to planning and investments that we believe will help Savant build density and improve more lives in the northeast,.”

Corrigan is a 25-person, fee-only RIA with $1.15 billion in AUM. The firm offers personal financial planning, investment management, tax planning and estate planning services. It also prepares income tax returns for over 1,000 families. Corrigan’s tax service offering will be incorporated into the Savant Tax & Consulting business line. 

“Savant’s tax focus was one of the major reasons we considered partnering with the firm, but we were also attracted to the firm’s long-term vision, which can help benefit both our clients and our team,” David Corrigan, a CPA, founder and principal shareholder of Corrigan, said in a statement. “Savant is a recognized leader among top CPA financial planning firms, and our shared commitment to comprehensive wealth management, including tax planning and preparation, made Savant a logical choice for our team.”

Savant is 65% employee owned. Corrigan and 15 shareholders of Corrigan Financial became member-owners upon joining Savant at close.