Colorado CPA Charged with Defrauding Businesses of $2.5 Million in Taxes
A local Colorado accountant faces charges of transferring a minimum of $2.5 million, designated for payroll taxes, from at least eight local businesses to his personal account during the past four years. Don R. Iley of Iley & Associates in Centennial stands accused of significant fraud charges. Over the four year period, he allegedly reported zero employees and zero withholding taxes to the Internal Revenue Service for his clients’ businesses.
Colorado suspended his accounting certification pending the investigation. His accounting company was forced into Chapter 7 bankruptcy, and a pending lawsuit seeks to freeze any assets, according to court documents.
The businesses damaged by his alleged conduct have the option of seeking repayment through a civil lawsuit or through bankruptcy court. Some of the owners have said that they believe that a Chapter 7 trustee can improve their chances of recovering money. A Denver-based firm with the largest claim against Iley reported that he swindled them out of $593,000.
The alleged victims still need to repay their taxes.
The former accounting clients discovered the fraud after they received forms from the IRS stating that they had no employees and that they did not owe taxes. Iley reportedly sent these clients paperwork indicating that he had paid the IRS, despite stealing their money.
One owner initially confronted Iley in November 2015. He reportedly justified his actions, claiming that the IRS had made a mistake, but then said he would repay the victim within a month. Jyll Tuggle, owner of the Umbrella Cafe and Bakery, meanwhile, alleged that Iley swindled her business out of about $100,000 since 2007. She told reporters that the IRS should have caught him years ago.
Iley has not responded to messages left by either the alleged victims or the media.
The Colorado’s State Board of Accountancy assessed Iley’s firm fines in 2001 for failing to register his business and for failing to address a consumer complaint. They again fined him in 2010 for failure to address complaints from five people. The agency ended his probation in May 2013.
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