The prosecutor and the defense attorney both portrayed a Brewster tax return preparer sympathetically but diverged on whether she should serve time for falsifying more than a hundred tax returns.
U.S. District Court Judge Cathy Seibel appears to have been persuaded by the prosecutor on Sept. 11, in sentencing Norma L. Melara, 55, to 14 months in prison, one year of supervised release, and ordering her to pay $222,790 in restitution to the IRS.
Melara, also known as Normal L. Melara Peralta, had pled guilty to ten counts of aiding and assisting preparation of false and fraudulent personal income tax returns.
Defense attorney Curtis Sobel recommended no prison time, in a sentencing letter submitted to the judge, stating that Melara had acted “out of a fervent desire to help others she felt a kinship with.”
Assistant federal prosecutor Kevin T. Sullivan acknowledged that Melara was trying to help hard-working, low-income clients get refunds to make ends meet, in a sentencing memorandum, but said no less than one year in prison was necessary to deter other tax professionals from defrauding the IRS.
Melara emigrated from El Savador at age 17, became a naturalized citizen, put herself through college, completed some graduate school coursework, and raised three children, according to court records. She separated from her husband in 2018 and has received no financial support from him.
From 2012 to 2016, she operated J&Y Associates tax return preparation business in Brewster.
She served mostly Spanish-speaking clients from Putnam and Westchester counties and Fairfield, Connecticut who worked in low-income jobs and had little understanding of tax returns.
Typically, Sullivan said, the clients brought few records and Melara did not review the completed tax returns with them.
The clients “always received refunds,” he said.
She created tax schedules that inflated refunds by falsely listing sales taxes, gifts to charity, unreimbursed business expenses, medical expenses, short-term capital losses, number of dependents, child care expenses and residential energy credits.
She prepared more than 6,000 tax returns from 2014 to April 2017. More than 100 false tax returns resulted in a tax loss of $222,790 to the Internal Revenue Service.
An undercover IRS agent who posed as a client provided Melara with income information that should have resulted in $264 in taxes owed, according to Sullivan’s memo. Without any prompting from the agent, Melara created deductions and credits that resulted in a $1,033 refund.
On Feb. 23, after she became aware of the investigation, she surrendered to the IRS. She pleaded guilty to 10 counts of preparing false income tax returns and she stipulated in a plea agreement to a sentencing guideline of 18 to 24 months in prison.
Milara admitted that her actions were wrong, Sobel stated in his sentencing letter, but she did not act out of a desire to personally benefit financially.
As she encountered families who worked hard but continued to be impoverished and destitute, “it was simply impossible for her, given her background, not to feel extreme empathy for these families.”
Her actions “were purely for the benefit of these families in an effort to help them cope with rising expenses,” he said, “especially the paralyzing cost of childcare.”
He noted that she also is the sole caregiver of her 12-year-old daughter, who would suffer severe hardship during the most critical stages of adolescent development, if her mother were imprisoned.
Sullivan said Melara was not necessarily motivated by a desire to enrich herself, other than getting repeat business from clients who got unwarranted tax refunds. She readily accepted responsibility for her actions and cooperated with the government. She has exhibited commendable hard-working, family-oriented behavior. And she is unlikely to repeat her crimes.
“There may be little need for specific deterrence as to this defendant,” Sullivan stated, but there is a compelling need for general deterrence.
He said Melara deliberately defrauded the government time and again for years and did not stop until the IRS confronted her.
As the U.S. faces staggering tax losses due to fraud, Sullivan said, the court should “send the message that defrauding the IRS is serious and will result in significant terms of incarceration.”
Judge Seibel ordered Melara to surrender to the Federal Bureau of Prisons on Nov. 9.
