Baton Rouge tax preparer arrested for alleged fraud scheme involving 'ghost' companies

Source: WAFB
Source: WAFB
LaSalle Building, Department of Revenue (Source: WAFB)
LaSalle Building, Department of Revenue (Source: WAFB)

BATON ROUGE, LA (WAFB) - A Baton Rouge tax preparer has been arrested on felony charges for an alleged tax fraud scheme involving "ghost" companies and phony business losses that cost Louisiana taxpayers hundreds of thousands of dollars.

Joseph A. Gillies allegedly prepared and submitted hundreds of tax returns that contained fabricated business losses for companies that, in some cases, did not exist.

Investigators believe that the scheme cost taxpayers an estimated $768,740. Byron Henderson with the Department of Revenue said the alleged scheme spanned from 2012 to 2015. In that time, Gillies is believed to have claimed fraudulent business expenses for his clients, including expenses for businesses that do not exist. It's something Henderson added is a common practice for those who try to defraud the government.

"What they will do is try to use this to build their client base by promising a larger than expected refund and it is fraud and it steals from the State of Louisiana," Henderson said.

In this case, the department was alerted to the alleged scheme after some of the tax preparer's clients came forward.

"Clients of his who reported to our investigators that when they submitted their tax records to him, they did not claim any business losses and some even said they were not business owners at all," Henderson added.

Henderson said tax fraud is something the department takes very seriously. He added his office has worked since 2013 in a joint effort with the Attorney General's Office to track down potential tax fraud schemes like this one. "Since that time we've arrested 63 people on suspicion of tax fraud," he said.

Gillies was booked into the East Baton Rouge Parish Prison Tuesday, January 31 on charges of principal filing or maintaining false public records and principal to illegal transmission of monetary funds.

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