Lena Cotton, manager at the Florida-based Professional Accounting LDC, has been found guilty of return preparer fraud by the US Justice Department, resulting in a permanent ban from preparing returns.
According to the court’s order, the injunction has been issued in response to violations of a previous order that had allowed the firm to prepare returns subject to certain restrictions.
The original allegations were filed in April 2017, as a complaint was launched against Cotton and the company claiming that they prepared returns with improper education credits, manipulated filing statuses, and improper vehicle deductions.
The Justice Department then filed allegations in August 2019 that found the firm in contempt of the 2017 order, imposing “additional limits on [the] defendants’ operations” that were labelled as their “final opportunity”.
However, 27 January 2021 saw Cotton and Professional Accounting LDC found in contempt of the order for a second time.
The court found the defendants to “have attempted to circumvent the terms of the injunction”, while violating “the restrictions placed upon them”.
Moreover, both Cotton and the firm have been barred from selling the group’s customer list to certain non-party individuals or entities, due to the “significant risk” of “fraudulent schemes” that could be employed by the defendants.