Exec at Rangel’s Nonprofit Pulls in Fake IRS Refunds

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October 21, 2010; Source: National Legal and Policy Center | It seems controversy follows some people. Rep. Charles Rangel (D-NY) has been dogged by questions of personal ethics for almost two years, including his failure to pay taxes on rental income from his beach house in the Dominican Republic.

Now, according to WebCPA.com, Kevin Crucey, a senior executive of the Upper Manhattan Empowerment Zone, has pleaded guilty to submitting false and fraudulent tax returns to the Internal Revenue Service and cashing approximately $250,000 in fraudulently obtained tax refund checks.

The Upper Manhattan Empowerment Zone is one of nine empowerment zones established by the Clinton Administration in 1994 to revitalize distressed communities by using public funds and tax incentives as catalysts for private investment. The embattled Rangel played a key role in the creation of UMEZ. He exercises dominating influence over its board of directors and has secured millions in federal earmarks for the nonprofit. Rangel directed millions in taxpayer money through UMEZ to another nonprofit known as Alianza Dominicana, which is Spanish for Dominican Alliance.

Crucey, a CPA, used his tax preparation business to file fraudulent tax returns using Social Security numbers and other identification information stolen from residents of Puerto Rico, according to prosecutors. The tax returns falsely claimed that the filers earned taxable income outside Puerto Rico but within the 50 states, and that they were entitled to a refund. Crucey then abused his high-level status at UMEZ to cash the refund checks and pocket the money.

It turns out Crucey is a member of the Association of Certified Fraud Examiners. One might think basic ethics concepts might have rubbed off on him.—Aaron Lester