Minneapolis tax preparer charged with defrauding state of more than $1.4M

Rona Griffin’s tax preparation business consistently laid a golden egg for hundreds of clients who trusted her refund-guaranteed income tax filings each year.

Working out of a tidy north Minneapolis house, Griffin usually charged only a few hundred dollars per client. Her apparent expertise proved highly profitable, earning her nearly $200,000 a year.

But Griffin’s special bookkeeping techniques weren’t learned in college. She consistently lied about her clients’ charitable contributions and business expenses, authorities said Thursday in announcing 53 felony counts against her. While meticulously filing false tax returns for years, she managed to forget to submit any returns for herself, Hennepin County Attorney Mike Freeman said.

Griffin, 51, is accused of filing false income tax statements and swindling people referred to her through family or business contacts. Her tax fraud case is the largest ever prosecuted by Freeman’s office, and one of the most important cases investigated by the state’s Department of Revenue, those agencies say.

“Taxpayers entrust preparers with personal information and their money,” Revenue Commissioner Cynthia Bauerly said at a news conference with Freeman. “We work to ensure everyone, including tax preparers, follows tax laws.”

The Revenue Department has recovered more than $500,000 of the $1.4 million in unreported and unpaid taxes owed to the state as the result of Griffin’s actions, and will continue to collect the remaining money. Nevertheless, the cost to Minnesota taxpayers is significant, Bauerly said.

Beyond the hundreds of hours it’s taken to unwind the case, Griffin’s clients were subjected to audits that required them to hire attorneys and tax professionals. Nearly all her clients will have to pay thousands of dollars in additional taxes.

A disturbing pattern

Griffin’s case, which Freeman said involved brazen cheating, first hit the Revenue Department’s radar in early 2012. Her business, HAH Broker Inc., started in Champlin in 2009 and was later moved to Minneapolis. She operated it with her two daughters.

Auditors with the Revenue Department’s individual-income and corporate tax units started reviewing returns by Griffin and found a pattern of apparent malfeasance, the criminal complaint says. They included unusually high charitable donations and questionable unreimbursed employee expenses.

By March 2014, the Revenue Department had started reviewing returns of 395 Griffin clients, both individual and business. A major pattern of false returns quickly emerged, according to the 28-page criminal complaint, which focuses on 10 clients who cooperated with authorities.

Griffin allegedly easily conned person after person, the complaint says. Client 1 paid her $80 a year to prepare his taxes. He was employed as a forklift operator, but she fraudulently listed his occupation as a sales representative who had more than $10,000 in unreimbursed employee expenses. He now owes $3,527 in back taxes.

Client 2, she said falsely, taught at a church’s Sunday school. Client 4’s child care and dependent care expenses were inflated.

Griffin really cooked the return of Client 6, the charges continue. She said the couple’s taxable income had been reduced by more than $45,000 when they sold a rental property at a loss, when in fact they’d made a profit, the complaint said. The couple are now on the hook for a $9,836 tax bill.

When several clients learned that they would be audited by the Revenue Department, Griffin told them the agency “was out to get me; we’ll get you out of this.” She asked them to sign power-of-attorney forms authorizing her to communicate with the department about the audits, the complaint said. She also wanted them to buy ledgers and create mileage reports to support travel deductions she falsely submitted, it said.

A history of charges

Although Griffin didn’t file tax returns for a number of years, she submitted property tax refund filings in 2010 and 2011, authorities say. And although she reported that she earned less than $12,000 each year, she actually averaged about $150,000 of income per year, the complaint said. These false filings, along with unsubmitted tax returns, created a loss of state tax revenue of at least $106,000.

Even before Thursday’s charges, Griffin had accrued a lengthy criminal record going back to 2000. She has been arrested on forgery and swindle charges in Benton and Stearns counties and faced more than a dozen civil filings.

Bauerly stressed that one alleged bad apple shouldn’t taint the reputation of the many reputable tax preparers in the state. People can check the Revenue Department’s website to find credible businesses, she said.

“These charges are important to bring justice to the defrauded individuals and Minnesota’s working taxpayers,” Bauerly said.