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Accountant Guilty of $11M Fraud Gets Enhanced Sentence

Feb. 4, 2019, 6:50 PM

An accountant will serve a longer time in prison after filing fraudulent tax returns while he was on probation for earlier negligence, the Tenth Circuit ruled Feb. 4.

Donald Iley tricked clients out of more than $11 million by failing to pay their payroll taxes, which he held in trust. After the fraudulent behavior was discovered in 2015, he pleaded guilty to wire fraud and helping in the preparation of false tax returns. He was sentenced to an enhanced range of 97 to 121 months’ imprisonment.

Iley’s sentence was properly enhanced for violating a 2010 Agreement and Final Agency Order, the U.S. Court of Appeals for the Tenth Circuit said. This order was a disciplinary sanction issued by the Colorado Board of Accountancy for negligent conduct which put him on a five year probation. The negligent conduct included failing to use client’s money to pay the IRS for payroll taxes.

Violation of any prior administrative order is grounds for an enhanced sentence under Section 2B1.1(b)(9)(C) of the U.S. Sentencing Guidelines Manual, the court said.

Judges Carlos F. Lucero, Harris L. Hartz, and Jerome A. Holmes sat on the panel.

The case is U.S. v. Iley, 10th Cir., No. 17-01269, 2/4/19.

To contact the reporter on this story: Carolina Vargas in Washington at cvargas@bloombergtax.com

To contact the editors responsible for this story: Jo-el J. Meyer at jmeyer@bloomberglaw.com; Nicholas Datlowe at ndatlowe@bloomberglaw.com

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