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Jun 24, 2009 
The patriarch of a Rialto tax preparation business was sentenced today in federal court to nine years in prison and must pay more than $15 million after he conspired to defraud the IRS.
United States District Judge Stephen G. Larson ordered Matthew Carl Berry, of Rialto, to pay $15,418,393 in restitution to the Internal Revenue Service, according to IRS officials.
Berry was sentenced in United States District Court in Riverside. He will spend three years on supervised release following his release from prison.
Berry’s daughters, Karen Denise Berry of San Bernardino and Carla Denine Berry of Rialto, as well as Ivan Taylor Johnson of San Bernardino and Valerie Madel Dixon of Rialto were also convicted in the case.
At trial, Matthew Berry was convicted on charges that he conspired with others to defraud the IRS and filed false personal income tax returns for the years 2001, 2002, and 2004.
The IRS will continue to aggressively investigate tax return preparers who knowingly prepare false tax returns, said Leslie P. DeMarco, Special Agent in Charge, IRS Criminal Investigation, Los Angeles Field Office.
“These dishonest preparers undermine the integrity of our tax system and must be held accountable,” DeMarco said. “This nine-year sentence serves as a reminder to all tax return preparers who intentionally prepare fraudulent tax returns. Their disregard for our tax system can lead them to prison.”
The false tax returns prepared by Berry for clients, when combined with the returns prepared by the other defendants, created losses of more than $45,000,000 in tax revenue to the IRS, according to court documents.
Karen Berry and Carla Berry pleaded guilty before trial to various charges including conspiracy to defraud the IRS, aiding and assisting in the preparation of false tax returns and subscribing to a false tax return.
Johnson and Dixon also previously pleaded guilty to charges contained in the indictment.
Court documents state Matthew Berry operated the tax business out of his Rialto residence from 1995 through 2003, according to IRS officials.
In early 2000, the daughters, Karen and Carla Berry, began preparing false income tax returns at the business. Two years later, Johnson and Dixon started preparing false income tax returns as well.
In 2004, the business relocated to a commercial building in Rialto. Matthew Berry and his daughters formed N.C.K. Services, Inc., to operate the tax business.
According to the plea agreements of the Berry sisters, Matthew Berry controlled the cash paid by the tax preparation businesses clients. He typically paid each return preparer weekly, in cash, based upon the number of returns the preparer had prepared during the preceding week.
Further, Berry deposited large amounts of cash received from his clients into bank accounts, in a way to avoid arousing the suspicions of bank employees, the IRS said.
Berry and his co-conspirators also bought cashier’s checks using the profits earned from their fraudulent business in their own names and the names of third-parties. They then deposited those checks into bank accounts which they controlled.
Karen Berry and Carla Berry face a statutory maximum of 11 years in federal prison, fines totaling $750,000, and restitution when sentenced Aug. 31, according to IRS officials.
Johnson was sentenced to nearly three years in federal prison, followed by three years of supervised release. He was also ordered to pay $19,034,901 in restitution to the IRS.
Dixon was sentenced to five years probation, including 10 months home detention, and she was ordered to pay $19,034,901 in restitution to the IRS.
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