East Flatbush tax preparer faces three years in prison over $1.1M false return scheme

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Melinda Jacob ran her tax preparation business from her East Flatbush residence on Rutland Road
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Federal prosecutors announced Monday that the former owner of an East Flatbush tax preparation business has pleaded guilty to stealing $1.1 million through a three-year long false return scheme.

Melinda Jacob, a 48-year-old Florida resident, faces up to three years in prison and financial penalties following the Feb. 5 hearing at Brooklyn Federal Court before Magistrate Judge James Cho.

“With the tax season upon us, today’s guilty plea underscores the message that tax preparers have an obligation to perform their duties honestly, and when they abuse their position by filing false information that defrauds the IRS, the return will be a felony conviction like this and additional penalties,” Breon Peace, United States Attorney for the Eastern District of New York, said while announcing the guilty plea.

It is alleged that the IRS suffered an aggregate tax loss of approximately $1,151,761 due to Jacob’s actions between 2019 and 2022, while she owned and operated Melinda Jacob Tax Services, located in her East Flatbush residence on Rutland Road.

According to federal prosecutors, Jacob inflated her clients’ tax refunds by preparing and submitting false tax returns to the IRS that claimed fictitious expenses relating to solar water heaters and geothermal heat pumps that resulted in the clients receiving fraudulent Residential Energy Credits.

Over the three year period, Jacob is said to have utilized Form 5695, an IRS form on which a taxpayer reported expenditures or costs associated with clean energy or energy efficient improvements to their home, and claimed one or both of the “Residential Clean Energy Credit” and the “Energy Efficient Home Improvement Credit” against their tax liability.

In most cases, Jacob made up the energy expenses listed on her clients’ tax returns and did not discuss the Residential Energy Credit with them, per the Eastern District of New York.

Thomas Fattorusso, Special Agent-in-Charge of the IRS criminal investigation, said Jacob’s plea puts her a step closer to the “consequences of her dishonesty and deceit.”

“While most tax preparers are reputable, it is the bad apples like Melinda Jacob who spoil the bunch. She took advantage of her role and her clients by using their returns to steal money from the government,” said Fattorusso.

Jacob is due to be sentenced on June 27 at Brooklyn Federal Court. Her lawyer, Will Newman, said Jacob recognizes that filing a false statement is a serious matter “and she accepts full responsibility.”