Fessum Ogbazion was found guilty of fraud and tax crimes in connection with a national tax return preparation company he owned and managed.
Ogbazion founded Instant Tax Service, and was so successful he franchised the companies through ITS Financial LLC. It was through ITS where he began advertising tax refund anticipation loans through a third party lender, despite the fact that ITS had no such lender to fund the loans. Ogbazion used the false ads to entice customers to apply for a loan they never qualified for, and then used the loan applications to prepare and file income tax returns, often without the customer’s permission. Between 2006 and 2011 ITS defrauded thousands and collected more than 70 million dollars in fees.
During 2009 and 2010 he failed to pay 1.3 million dollars in payroll taxes he collected from ITS employees. He evaded IRS attempts to collect these funds by directing business revenue to nominee accounts, placing assets in the names of nominee entities and making false statements to an IRS revenue officer.
Ogbazion was sentenced to one year and one day in prison and ordered to pay $933,708 in restitution to the United States.