New Jersey tax preparer pleads guilty in false return case tied to U.S. tax loss

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NJ tax preparer pleads guilty

Highlights

Demetreus Hargrove, owner of The Wright Star LLC, pleads guilty to preparing false tax returns and admits to claiming fraudulent credits, deductions, and losses from 2019 to 2023.
Hargrove agrees to pay $255,378 in restitution to the IRS after filing false returns for himself, his business, and clients, misclassifying personal expenses as deductible business expenses.
Sentencing is scheduled for April 13, 2027, with a maximum penalty of three years in prison, reflecting the Justice Department’s intensified crackdown on tax fraud.

Court case details and admitted conduct

As reported by the U.S. Department of Justice, Demetreus Hargrove of Hoboken pleads guilty to one count of aiding and assisting in the preparation of false tax returns after admitting to fraudulent practices tied to his tax preparation business, The Wright Star LLC.

According to court documents and statements made in court, Hargrove recharacterized clients’ personal expenses as deductible business expenses for their business entities. Prosecutors say he then reported those false business expenses and other false items on returns for those entities, while also filing individual income tax returns for clients that reported false business losses and fabricated bad debts.

Hargrove also admits filing false tax returns for himself and The Wright Star LLC for the 2019 through 2023 tax years. Those returns claimed improper credits, deductions, losses or expenses that inflated his refunds, and he agrees to pay $255,378 in restitution to the IRS.

Sentencing timeline and enforcement impact

Sentencing is scheduled for April 13, 2027, and Hargrove faces a maximum penalty of three years in prison. A federal district court judge will determine the sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Assistant Attorney General Colin M. McDonald of the Justice Department’s National Fraud Enforcement Division announces the case, while IRS Criminal Investigation investigates it. Trial Attorneys Lyndi McVey and Likhitha Butchireddygari of the Fraud Division’s Tax Section are prosecuting the matter.

The case adds to a broader federal enforcement push against tax and benefits-related fraud. The Justice Department says its Fraud Division, announced on April 7, is focused on investigating and prosecuting fraud against the American people.

As a reminder, we recently covered a Court of Appeal ruling on commission partner liability under Malaysia’s Partnership Act 1961.

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