Hacienda Heights man gets 30-months in prison for father-son tax return scheme

LOS ANGELES >> A Hacienda Heights man began serving a two-and-a-half-year prison term after he was sentenced for his role in a scheme that netted more than $2.6 million in bogus tax returns using stolen identities, authorities said.
Heber Cotton, 40, pleaded guilty late last year to a count of conspiracy to defraud the federal government by obtaining the payment of fraudulent tax refunds, U.S. Department of Justice spokesman Thom Mrozek said in a written statement. U.S. District Judge Michael W. Firzgerald handed down the 30-month prison term Monday in federal court in Los Angeles.
Cotton was additionally ordered to pay $725,000 in restitution.
His father and co-conspirator, 64-year-old Adel Cotton, pleaded guilty to the same charge in 2012 and has since been sentenced to 4 years and three months in federal prison, officials said.
“This father and son pair prolifically defrauded the government and hundreds of taxpayers, earning them the significant sentences imposed by the court,” according to United States Attorney for the Central District of California Eileen M. Decker.
From December of 2008 to March of 2010, “the Cottons caused at least 275 fraudulent income tax returns to be filed with the IRS,” Mrozek said. “Those fraudulent returns sought income tax refunds totaling more than $2.6 million.”
The father and son used the names and social security numbers of victims without their knowledge to fill out fraudulent tax returns, officials said. They instructed the refund checks to be sent to addressed they controlled.
Heber Cotton admitted in court documents that he gave stolen identity information to a co-conspirator, who worked as a bank manager, who opened bank accounts with the fraudulently obtained funds, in exchange for a 20 percent cut of each refund check.
The bank manager, identified in court documents as Michael Rodriguez, managed a U.S. Bank branch inside a Tustin supermarket, Mrozek said.
He has since pleaded guilty to charges in connection with the scheme and is awaiting sentencing.
“These unscrupulous defendants, a father and son team, thought they had figured out a clever scheme to thwart the IRS and steal from American taxpayers,” IRS Criminal Investigation’s Acting Special Agent in Charge Anthony J. Orlando added. “IRS CI has made investigating refund fraud and identity theft a top priority and we will vigorously pursue those who undermine the integrity of the U.S. tax system.”

Facebook Twitter Reddit Tumblr Linkedin Email

Taxpayers fund West Covina PD junket at beach resort

Some would call this living large. The timing is questionable considering the state of West Covina’s finances are such that the city can’t even afford to pay to televise its council meetings and still faces lawsuits from two employees that could cost $100,000s. 

Here’s Tom Himes investigative piece:

WEST COVINA – The city’s police commanders started a three day and two night team building workshop on Monday at a four star resort and spa in Orange County.

Police Chief Frank Wills said 21 officers and two civilian staffers participated in the first day of the retreat at Marriott’s Laguna Cliffs Resort and Spa in Dana Point.

“We need to develop a plan for the future,” Wills said. “We’re going to have to downsize (because of fiscal challenges) and we have to develope a plan for that.”

The resort offers two outdoor heated pools, whirlpools, yoga classes and full-service spa, according to its Web site.

The taxpayer funded California Commission on Peace Officer’s Standards and Training (POST) will reimburse the city for about $8,000 in expenses associated with the retreat, City Manager Andrew Pasmant said.

Facebook Twitter Reddit Tumblr Linkedin Email

Tax Day tea party anyone?

Anti-tax rallys are taking place across the USA today as folks deal with the heavy burden of taxes and the specter of more and more and more. If anyone ever needed proof that higher taxes don’t necessarily stimulate the economy, look no further than Ryan Carter’s story in today’s newspaper.

In the story local auto dealers explain how the implementation of higher state sales taxes on April 1, had a chilling effect on car sales. They fear the state’s plan to raise vehicle license fees in May will only hurt sales more.
Here’s a list of Tea Parties in California from taxdayteaparty.com
Here’s a taste of Ryan’s story:

WEST COVINA – A hike in the state’s sales tax may have resulted in weakened auto sales on many lots since the levy took effect April 1, and dealers now worry that increased vehicle license fees could sour sales even more.

Whether or not soft sales are linked to the increased tax increase remains unclear. But the added cost to consumers certainly hasn’t helped local dealers in recent days.

Many dealers now say the sales tax increase, though troublesome, didn’t have the impact that the increase in the vehicle license fee will have. Those fees are expected to more than double on May 15.

“That’s the big one,” said Mike Kern, finance manager for Glendora Hyundai and Suzuki.

Facebook Twitter Reddit Tumblr Linkedin Email

Thursday’s column (Fruit-flavored Nicorette)

If you smoke, you probably already know the price of a pack of cigarettes went up pretty dramatically over the past couple of days.

Smokers, who were paying anywhere from $4 to $4.50 a pack, suddenly find themselves paying anywhere from $5 to $6 for 20 “coffin nails.”

I stopped at a liquor store near home last night and asked the kid behind the counter, “What gives?”

“Something about new taxes,” he said. “(The tobacco companies) raised their prices to get a few more bucks before the tax kicks in.”

At a liquor store down the street from the office, the guy that usually helps me with a smile was simply mad Wednesday.

“I don’t get why they keep adding taxes to everything,” he said. “Pretty soon none of my customers can afford to smoke.”

If you are as mad as my liquor store guy, you can write your letter of thanks to the federal government. As of April 1, the federal excise on a pack of smokes increases from 39 cents to $1. That’s about a 150 percent jump.

Chewers and cigar aficionados are going to have to chip in too.

I follow the news for a living, but I don’t remember cigarette smokers being praised for saving the federal government – again.

Truthfully, this time it’s for the children.

The increased tax revenue reportedly will be spent providing health care to 3.5 million uninsured children at the cost of $32.8 billion, according to published reports.

Who knows how much of that will be used to hire new high-salaried bureaucrats to administer the program? Want to bet a good chunk of the money will never find its way to a sick child because its lining the pocket of some Washington fat cats?

Charles D. Conner, American Lung Association president and CEO, issued platitudes about sick smokers, but in the end flatly admitted the tax is an effort to help a dismal economy.

“Considering half of all smokers will die prematurely from their addiction, increasing the federal cigarette tax will go a long (way) to save young lives and is also good for our economy,” Conner said in a statement he wrote on Feb 5.

Here’s the kicker: There’s a good chance the state will tack another $1.50 on top of the increased federal tax. On Tuesday, a group of Democrats in the state Senate, led by Alex Padilla, introduced SB 600, which proposes to do just that.

Padilla has latched on to something he thinks will resonate with his cronies because smoking is so unpopular.

I’ll admit I enjoy my nicotine fixes. No doubt my family, friends and co-workers recognize the difference in my personality when I’m deprived.

On the other hand, I don’t want to give the government another dime of my hard-earned money. Guess what I found out? There’s no excise taxes on nicotine gum.

I’m sold.

Google search of the week: “French Military Victories”

I typed it in and pressed the “I’m Feeling Lucky” button.

Google’s response?

“Did you mean French military defeats?”

Facebook Twitter Reddit Tumblr Linkedin Email

Price of smokes is going up…way up! Seven bucks a pack?!?

Cigarette prices are apparently on the rise. I know my local 7-Eleven is urging customers to buy before April 1 when new federal taxes take effect, a new state tax is also in place.

Last pack I bought was $4.50. But I’ve heard tales of smokes going for between $6 and $7 bucks a pack. What are you paying? Looks like smokers are balancing the budget, paying for the stimulus and fun times in Sacramento.


Facebook Twitter Reddit Tumblr Linkedin Email