A Barrington man, the former owner of a Deerfield-based accounting firm, has been charged in federal court with preparing false tax returns that “significantly reduced” his clients’ tax liability.
A federal grand jury in Chicago returned an indictment last month charging Gary Sandiego, 53, of Barrington.
The indictment charges Sandiego with 17 counts of fraud and false statements.
According to the indictment, Sandiego owned a tax return preparation business called G. Sandiego and Associates, located at 707 Lake Cook Road in Deerfield.
Sandiego prepared and filed false tax returns for his clients, the indictment said.
The false returns allegedly reported fictitious or inflated unreimbursed employment-related expenses and false residential energy credits.
It resulted in a “significant reduction” of Sandiego’s clients’ total tax liability, prosecutors said.
The Internal Revenue Service (IRS) Criminal Investigation Division conducted the investigation into Sandiego.
In 2018, the U.S. Department of Justice filed a lawsuit against Sandiego alleging that he had been inflating deductions and falsifying tax credits on his clients’ tax returns since as early as 2011.
The IRS fined Sandiego in 2012 after he failed to comply with regulations.
Prosecutors said Sandiego continued “his pattern of preparing returns” through schemes despite the fine and warning.
“The fraudulent returns that Sandiego has prepared and filed have caused — and continue to cause — substantial harm to the Government by falsely reducing his customers’ reported tax liabilities, helping taxpayers avoid paying their fair share of tax or obtain refunds to which they were not entitled,” DOJ attorneys said in the 2018 lawsuit.
The IRS interviewed 44 of Sandiego’s clients and 43 of them reported that he had reported incorrect and false information on their returns, the lawsuit said.
A judge in 2019 ordered Sandiego to pay $358,000 as a result of the lawsuit and also barred him from being a tax return preparer.
Sandiego faces up to three years in prison on each of his 17 criminal counts if convicted.
Sandiego surrendered himself on the charges and a judge allowed him to be released from federal custody while he awaits trial.
A status hearing is scheduled for March 22.