CPA Faces Up to 31 Years in Prison for Falsifying Documents and Failing to File Tax Returns

Timothy Trifilo, a D.C.-based accountant, has pleaded guilty to mortgage fraud and tax evasion, admitting to falsifying mortgage documents and failing to file tax returns, resulting in significant financial losses to the IRS.

The Guilty Plea Details

• Defendant: Timothy Trifilo, CPA.
• Location: Washington, D.C.
• Charges: False statements on a mortgage loan application and failure to file federal income tax returns.
• Tax Loss: Estimated $2,057,256.40.
• Mortgage Fraud Amount: $1.36 Million.
• Unreported Income: Over $7.7 Million.

Long-time CPA Engaged in Tax and Mortgage Fraud

Trifilo, despite his professional background, failed to comply with basic tax laws.

Details of the Fraud

1. Professional Background: Worked for major tax and accounting firms, and served as Managing Director of a tax firm.
2. Failure to File: Failed to file federal income tax returns from at least 2010 through 2020.
3. Fraudulent Mortgage Application: Submitted fake tax documents to secure a $1.36 million mortgage in February 2023.
4. Fabricated Tax Returns: Falsely listed a former colleague as the preparer without their knowledge or consent.
5. Bank Approval: The bank approved the mortgage based on these fraudulent submissions.

Potential Prison Time and Penalties

Trifilo faces significant prison time and financial penalties.

Possible Penalties

1. False Statement on Loan Application: Up to 30 years in prison.
2. Failure to File Tax Return: Up to one year in prison per count.
3. Sentencing Date: May 19, 2025.
4. Additional Penalties: Monetary penalties, restitution, and supervised release.
5. Sentencing Factors: U.S. Sentencing Guidelines and other statutory factors.

Government Response and Investigation

The Justice Department and IRS-CI are handling the prosecution.

Agencies Involved

1. Acting Deputy Assistant Attorney General Stuart M. Goldberg (DOJ Tax Division): Announced the guilty plea.
2. IRS Criminal Investigation (IRS-CI): Investigated the case.
3. Trial Attorneys Melissa S. Siskind and Alexis Fleszar (DOJ Tax Division): Handling the prosecution.

Lessons for Professionals and Taxpayers

This case highlights the importance of tax compliance, even for licensed professionals.

Important Lessons

1. Severe Penalties: Failure to file tax returns can result in prison time.
2. Loan Document Falsification: Falsifying loan documents is a serious federal crime.
3. Identity Misuse: Misusing another professional’s identity escalates legal exposure.
4. System Integrity: Mortgage fraud and tax evasion undermine the financial and tax systems.

Final Thoughts: Prioritize Compliance

1. Cautionary Tale: Trifilo’s case serves as a warning for accountants and tax professionals.
2. Compliance and Transparency: Taxpayers should prioritize compliance in tax and financial dealings.
3. Risk of Fraud: Ignoring tax obligations and engaging in fraud carries significant risks.
4. Sentencing Reminder: The upcoming sentencing serves as a reminder of the consequences

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