NBA star Zaza Pachulia and his wife recently learned the hard way that it’s critical to use a reputable accountant. Pachulia’s identity was used by his accountant, Randy Usow, to defraud the IRS of more than $800,000.
The case is eye-opening in several ways:
- Pachulia and his wife worked with Usow for about seven years before any alleged fraud took place. After that, starting in about 2011, it’s said that the accountant filed at least four bogus returns that generated excessive refunds, most of which the NBA player never saw.
- A single $463,867 refund from a 2014 return Usow prepared went to a bank account Usow established in both his and Pachulia’s name (without Pachulia ‘s knowledge). Pachulia and his wife, instead, were given copies of a return that showed a smaller $164,000 refund.
- Pachulia and his wife sued Usow in 2016 claiming they had incurred about $82,000 in penalties and interest from the IRS, which was their first indication of Usow’s transgressions.
- Usow wasn’t charged with a crime until last fall when he agreed to plead guilty to two counts — theft of government property and identity theft.
- Unbelievably, he is being allowed to wait to surrender (and serve 30 months in prison) until after April 30 so that he can finish the tax returns for his remaining clients.
Fraud can occur over a period of years, and it can take even more time for the crime to come to light, much less justice. In the meantime, these fraudulent accountants can still practice—at times, as in this case, given extra time to complete the tax returns for other clients even with a criminal conviction resting on their shoulders.
To help protect yourself, take a look at our previous advice on avoiding tax-return fraud. Pay attention to how, when, and what taxes are being filed on your behalf by signing up for your own IRS online account and checking it periodically. To help ensure you’re working with a reputable CPA, you can check their state board standing. The Texas State Board of Public Accountancy offers a license database online. And don’t be afraid to audit your own accounting department or CPA regularly with the help of a third-party accountant. Firms like ours even offer forensic accounting and investigative auditing for sophisticated cases. Contact us for more information.
Image by tookapic from Pixabay