According to the indictment and evidence introduced during trial, Toto-Ngosso ran a tax preparation business out of his home, located on East Shaw Avenue in Silver Spring. Toto-Ngosso prepared false tax returns for clients for tax years 2001 through 2006 which claimed numerous fraudulent deductions including false dependents, inflated charitable contributions, fraudulent un-reimbursed employee expenses and other false and fraudulent deductions to which Toto-Ngosso knew his clients were not entitled.

Evidence was also introduced that Toto-Ngosso purchased the names and Social Security numbers of individuals, which he later sold to his clients for $500 to $800 per dependent. Toto-Ngosso used these names and Social Security numbers on the false tax returns in order to secure larger refunds for his clients.

At trial, the government introduced evidence that after Toto-Ngosso learned he was under investigation by the IRS, he instructed his clients to lie about the information that he reported on their tax returns.

U.S. District Judge Roger W. Titus scheduled sentencing for Sept. 21, 2009. Toto-Ngosso was detained pending sentencing. He faces a maximum of three years in prison and a $250,000 fine for each count of conviction.

Acting Assistant Attorney General John A. DiCicco of the Justice Department’s Tax Division commended the IRS Criminal Investigation special agents who investigated the case as well as Tax Division trial attorneys Jorge Almonte and Tino Lisella who prosecuted the case. Acting Assistant Attorney General DiCicco also thanked the U.S. Attorney’s Office in Greenbelt, Maryland for their assistance.

Sulfridge, 44, pleaded guilty to a two-count criminal information charging him with conspiracy to commit wire fraud and securities fraud, as well as tax evasion.

According to the plea agreement and evidence presented during the plea hearing, Image Entry, of London, Ky., is a data processing company that operated nearly a dozen facilities located in the Southeastern and Midwestern United States. Sourcecorp is a consulting and information management corporation located in Dallas that purchased Image Entry in March 2001.

According to the plea agreement and evidence presented during the plea hearing, the terms of the purchase agreement provided that in addition to the $33 million paid at closing, an additional sum of approximately $11 million would be held back and paid during the three succeeding years if Image Entry met its earnings targets. The purchase agreement also provided for additional incentive payments of up to $25 million during the three years that would be calculated based on the amount by which those earnings targets were exceeded.

According to the plea agreement and evidence presented during the plea hearing, Sulfridge and others conspired to fraudulently inflate Image Entry earnings in order to fraudulently increase those annual incentive payments by Sourcecorp. The total cost of the acquisition by Sourcecorp amounted to approximately $68 million, including the incentive payments.

Also according to the plea agreement and evidence presented at today’s hearing, Sulfridge allegedly caused a tax loss of $190,111 when he acted to evade income taxes due on approximately $592,393 in bonus compensation he was paid based on the fraudulently inflated earnings. According to the information, Sulfridge failed to report that income on the annual joint individual income tax returns he filed with the Internal Revenue Service (IRS) for tax years 2001, 2002 and 2004, and in May 2005 Sulfridge allegedly submitted a materially false income tax return to the IRS for tax year 2003.

At sentencing, Sulfridge faces a maximum penalty of five years in prison on the conspiracy count and five years on the tax evasion count. Sulfridge also faces a maximum fine of $250,000 on the conspiracy count and a maximum fine of $100,000 on the tax evasion count. A sentencing date has not yet been scheduled.

The case is being prosecuted by William H. Stapleton Jr., of the Criminal Division’s Fraud Section, James Etri of the U.S. Securities and Exchange Commission acting as a Special Attorney assigned to the Criminal Division, and by Jill M. Cassara of the Tax Division. The case is being investigated by the FBI and the IRS.