Lowell Tax Preparer Ordered to Stop Doing Business After Being Sued for Defrauding Clients, Keeping Refunds
Defendant Allegedly Filed Hundreds of Inflated and Falsified Tax Returns without Clients’ Knowledge
BOSTON – As Massachusetts residents prepare their tax returns this tax season, Attorney General Maura Healey has stopped a Lowell tax preparer from doing business after he allegedly defrauded clients by filing tax returns containing inflated and falsified information on their behalf and keeping the artificially inflated portions of the refunds.
A request for a preliminary injunction was granted last week in Middlesex Superior Court against Samuel M. Dangaiso and his unregistered company, Tax Enterprises, based in Lowell.
“We allege that this defendant filed more than $2 million in fraudulent deductions and pocketed tens of thousands of dollars of the falsified refunds,” said AG Healey. “This tax season, we will be watching for scam tax preparers and will take action to stop tax fraud in order to protect the public.”
“We appreciate the Attorney General’s assistance and cooperation in preventing the defendant from doing business during the tax season and helping to protect taxpayers,” said Department of Revenue Commissioner Michael J. Heffernan. “The Department is committed to identifying and exposing tax fraud and abuse.”
The injunction, effective immediately, prohibits Dangaiso from preparing and submitting state tax returns for Massachusetts taxpayers. It also freezes all of his assets and prohibits him from destroying any evidence while the case is ongoing.
The AG’s Office sued Dangaiso and his company on Feb. 16 after an investigation conducted by the Massachusetts Department of Revenue (DOR) revealed that Dangaiso was allegedly engaged in serial tax fraud and unfair and deceptive business practices relating to personal income tax returns in Massachusetts since at least 2009.
According to the AG’s complaint, on hundreds of occasions, Dangaiso filed tax returns containing inaccurate information without the knowledge or consent of his customers. In his scheme, Dangaiso allegedly invented unjustified deductions, taxpayer bank account information, and claimed fake dependents.
Dangaiso would allegedly use these inaccurate tax returns to generate inflated tax refunds and would direct the excessive refunds to his bank account or a prepaid debit card in his possession. He would then allegedly transfer the amount his customer was expecting as a refund and keep the remainder for himself. The AG’s investigation revealed that he kept at least $150,000 in refunds.
According to the complaint, one of the most common alterations that Dangaiso made to his clients’ tax returns was to claim a deduction for unreimbursed employee business expenses. Since 2009, Dangaiso filed about 300 tax returns with DOR on behalf of low or medium income earners claiming a combined total of more than $2 million in deductions for unreimbursed employee business expenses—an average of about $7,000 for each client for expenses that the clients did not incur.
Dangaiso also allegedly altered and filed tax returns without his clients’ knowledge to include other kinds of false information and claim other deductions and tax credits in order to generate inflated refunds. Dangaiso apparently submitted returns that identified clients as the head of household when a taxpayer was single or claimed children that were either fictitious or entirely unknown to his clients as dependents.
The AG’s Office is seeking damages and injunctive relief based on Dangaiso’s unfair and deceptive practices. Consumers that worked with Dangaiso or Tax Enterprises and have questions about their tax returns should contact Lisa Dell’Anno at the Massachusetts Department of Revenue at 617-626-3514.
The matter is being handled by Assistant Attorney General Brendan Jarboe and Paralegal Ivy Yan of AG Healey’s Consumer Protection Division, with assistance from DOR.