Date: 10-20-2014

Case Style: United States of America v. Geraldine Juanita Sotelo

Case Number: 1:14-cr-00031-RBJ

Judge: R. Brooke Jackson

Court: United States District Court for the District of Colorado (Denver County)

Plaintiff's Attorney: Thomas Mark O'Rourke

Defendant's Attorney: Amanda Cruser

Description: DENVER, CO – Geraldine Juanita Sotelo, age 64, of Thornton, Colorado, pled guilty last week before U.S. District Court Judge R. Brooke Jackson to aiding and assisting in the preparation of false tax returns, United States Attorney John Walsh and IRS Criminal Investigation Special Agent in Charge Stephen Boyd announced. Judge Jackson is scheduled to sentence Sotelo on January 26, 2015. Sotelo was indicted by a federal grand jury in Denver on January 28, 2014.

According to information contained in the plea and indictment, Sotelo began preparing and filing tax returns for clients around 1999 under the name J&G Bilingual Services in Thornton, Colorado. Sotelo was a co-owner and the manager of the business. J&G Bilingual Services typically followed a set procedure in preparing a tax return for a client. The client would come into J&G's office, met with one of Sotelo's employees, and provided information about his or her income and expenses. The J&G employee entered the information into a computer, and a software program generated a draft of the client's tax return. The draft then was reviewed by Sotelo.

For tax returns during the years 2007, 2008, and 2009, Sotelo would make changes to draft returns during her reviews or directed her employees to make change which often included increased charitable contributions, unreimbursed employee expenses, personal property taxes, and other itemized deductions without discussing the changes with the clients. Each of the twenty-six returns mentioned in the Indictment requested a refund, in amounts ranging from $1,282 to $7,140, and each was false in more than one respect. On Schedule A of all twenty-six returns were false itemized deductions, overstating the amount clients paid in personal property taxes and the amounts of their gifts to charities. All but two schedules misstated unreimbursed employee expenses and two schedules falsified medical and dental expenses.

Seven of the twenty-six returns misrepresented that taxpayers were eligible for credits for child and dependent care expenses. To support the claim for child and dependent care expenses each return included Form 2441, which listed the care provider's name, SSN and the amount the taxpayer paid to the provider during the tax year. When Sotelo and her employees, acting at her direction, falsified that information, they sometimes consulted what they called the "baby sitter list." The list contained information under three column headings: (1) "NAME," (2) "BABY SITTER SSN/ EIN," and (3) "ZIP CODE." At an employee meeting during the relevant time, Sotelo announced that J&G had to stop using the baby sitter list because "the IRS is catching on."

The tax loss resulting from the false entries on the twenty-six returns was $71,978. In April 2010, two IRS special agents interviewed Sotelo, who at first claimed that all of the information on J&G-prepared returns came from the clients and the returns did not contain false entries. When one of the agents told her that her statements were not consistent with what the IRS had learned, Sotelo admitted that she did "fudge" numbers on her clients' returns.

Sotelo pled guilty to one count of aiding and assisting in the preparation of false tax return, which carries a penalty of not more than 3 years in federal prison, and a fine of up to $100,000.

This case was investigated by Internal Revenue Service – Criminal Investigation with assistance from the Special Enforcement Program of the Internal Revenue Service and prosecuted by the Economic Crime Section of the U.S. Attorney’s Office’s Criminal Division.

Outcome: See above

Plaintiff's Experts:

Defendant's Experts:

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