A lot of people in Maung No’s community – more than 1,000 refugees at last count – trusted him.
They also fell victim to him. And so did the government, to the tune of $2.3 million.
No’s reputation among Burmese refugees as a trustworthy tax preparer took a hit Tuesday when the new U.S. citizen admitted cheating his clients and the Internal Revenue Service as part of plea deal in Buffalo federal court.
Prosecutors say No, a 25-year-old Burmese native, exploited people’s trust in him and, without their knowledge, improperly added fraudulent tax credits to their yearly tax returns.
The goal, they say, was to increase people’s refunds and, in turn, the percentage fee charged by No’s employer.
“There’s a very naive notion that people in one’s own community will not take advantage of them,” said Denise Phillips Beehag, director of refugee and employment services at the International Institute of Buffalo.
The impact of No’s criminal conduct is hard to gauge, but prosecutors believe at least 1,000 local refugees were victimized by No and the now-defunct companies he worked for, VPS Income Tax and BTS Income Tax.
No’s guilty plea stems from his admission that he illegally added tax credits to his clients’ tax returns even though they were not entitled to them.
The credits, in turn, would result in a higher return to the client and a higher percentage fee for No’s employer. The company’s fee was usually 10 percent of its client’s return.
“They didn’t know the credits were being added to their returns,” Assistant U.S. Attorney Trini E. Ross said of the victims.
Ross said the fraudulent tax returns were filed in 2011 and 2012 and resulted in a $2.3 million loss to the IRS. No, who now works as a cab driver, was ordered to repay that money as part of his plea agreement.
Lawrence Desiderio, No’s lawyer, says his client, who gained his citizenship earlier this year, knew what he was doing was wrong but fell in with a bad crowd when he went to work as a tax preparer. He also indicated others may be under investigation.
“He got involved with some unscrupulous people,” Desiderio said.
As part of his deal with prosecutors, No pleaded guilty to a felony charge of preparing false tax returns. He was investigated by the IRS’ Criminal Investigations Division and now faces up to 46 months in prison.
The government’s indictment of No was under court-ordered seal until he appeared Tuesday before U.S. District Judge Richard J. Arcara, but Beehag says her knowledge of the case dates back at least a year. She said the International Institute worked with the Volunteer Lawyers Project to advise victims on how to deal with the IRS and the allegations of fraud.
Unfortunately, No’s targeting of people in his own community is not unique to Buffalo or the local refugee community, Beehag said.
She said the institute has a long history of providing financial literacy education to refugees, and yet people continue to fall victim to crooks and con artists.
Prosecutors say No was especially credible because of his reputation in the Burmese community as someone you could trust. Now, that trust is gone forever.
“There’s the financial burden,” Beehag said of the impact on victims. “But there’s also an emotional burden because people don’t want to admit they were taken advantage of. People also don’t want this type of activity associated with their community.”
No will be sentenced Dec. 4.