A Livingston man was arrested this morning for allegedly filing hundreds of phony federal income tax returns. Todd P. Halpern, 46, is accused of using the identity of a dead return preparer, whose business he bought in 2008.
U.S. Attorney Paul J. Fishman announced that Halpern was charged by complaint with one count of tax fraud and one count of identity theft. He was arrested at his home this morning by agents of the FBI and IRS.
From 2009 through 2010, Halpern allegedly prepared and filed 657 fraudulent federal income tax returns with the IRS using the Electronic Filing Identification Number of a deceased tax return preparer. In court documents, the deceased tax returner is only referred to as “V.R.”
Halpern prepared and filed the tax returns using stolen identities of actual taxpayers, without their knowledge. The tax returns contained fraudulent income and deduction amounts, which allowed Halpern to receive tax refunds deposited directly into his personal bank account.
Halpern accumulated a total of $373,938 in refunds from fraudulent tax returns according to IRS agents. The funds were wired into Halpern’s personal bank account between July 2009 and August 2009. According to court documents, among the items bought with the stolen money were gold coins, season tickets to the New York Giants, a 2007 Cadillac Escalade and a 2008 Lexus GX-470. He also used the money to buy car parts for his classic 1957 Chevy Bel Air.
This is not Halpern’s first time in trouble for tax theft. In 2000, Halpern and his father, George Halpern, pleaded guilty to charges of filing fraudulent tax returns. The Halperns were sentenced to probation and prohibited from operating an accounting or tax preparation business. However, both Halperns continued to prepare tax returns and when caught, they were sentenced to a jail sentence. George received a one year sentence, while Todd was locked up for 90 days.
In 2002, Halpern was arrested again for tax fraud and on September 6, 2002, he pleaded guilty to stealing $367,261.51 in New Jersey sales tax payments from 1999 to 2001. He had stolen the money from clients of the tax preparation business that he had reopened. He was sentenced to five years in prison.
A year after being released, Halpern bought A & V Financials, a tax return preparation business located in Guttenberg, N.J., from the widow of the prior owner, V.R., who died in March 2008. In the sale, Halpern received the company’s computers and all of its client records.
As part of the purchasing agreement, Halpern was required to obtain a new EFIN number in his own name. However, due to the stipulations from his previous sentences, he was not allowed to do so. So instead, he continued to file tax returns using V.R.’s EFIN number, even though V.R. was dead.
The charges of tax fraud and identity theft are each punishable by a maximum potential penalty of five years in prison and a fine of $250,000.