DAVENPORT — A Muscatine tax attorney pleaded guilty Monday in federal court to filing fraudulent tax returns for two people over the course of several years and pocketing refunds of over $600,000.
Soo-Hyun Jung, also known as Jay Jung, 46, of Coralville, pleaded guilty in U.S. District Court to two counts of mail fraud and one count of making false claims to the U.S. Department of Treasury.
Jung, formerly a lawyer with Nepple Law Firm in Muscatine, faces up to 20 years for each mail fraud count and up to five years for the false claims charge. He also faces restitution plus any Internal Revenue Service penalties and fines assessed to the victims due to Jung’s scheme. The restitution will be determined at sentencing, which hasn’t been set at this time.
Jung, during the plea admitted to a scheme involving filing tax returns for “R.M.,” as identified in court documents, after he received his power of attorney. Jung could file the tax claims but wasn’t authorized to sign returns on behalf of R.M.
R.M. signed an agreement to have Jung prepare his taxes for 2002-2103, according to the plea agreement. Jung first prepared taxes for 2002-2005 with R.M.’s signature but when he called the IRS to check on the status of those returns he changed R.M.’s address to his business address in Coralville.
Jung admitted during the plea that he file tax returns for R.M. but Jung was forging his client’s signature and the refunds were going to his office. He also admitted that during 2015 he filed R.M.’s taxes for 2012, 2013 and 2014 and he received separate refunds for $2,220, $15,252 and $2,322. All were submitted without his client’s knowledge.
The plea shows Jung also deposited tax refunds in a Nepple Law trust account Oct. 2, 2015 for $202,180 for tax years 2003 and 2004. Jung forged R.M.’s signatures on these checks.
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Jung also deposited tax refunds in the trust account on Oct. 9, 2015 for $49,707, according to the plea. Then on Oct. 16, he issued a check for $236,886 from the trust account to Wells Fargo Bank so he could purchase a cashier’s check payable to R.M. and himself.
Jung also purchased a cashier’s check with money from the scheme to pay off a lien on his 2014 BMW M6 Gran Coupe, according to the plea.
Jung also prepared tax returns for another client, “C.T.,” who authorized Vanguard financial service to give Jung access to his account and tax information, according to the plea agreement. On May 13, 2016, Jung submitted a disbursement request for Vanguard to issue a check for $200,000 payable to C.T. but this check was mailed to Jung’s office. Jung then forged C.T.’s signature and deposited into a Nepple Law trust account.
On May 27, 2106, Jung then issued a check for $199,000 from the trust account to Wells Fargo to purchase a cashier’s check, which was payable to C.T. or himself.
Court documents show the victims’ loss from the scheme totaled about $618,022.
Jung received a public reprimand from the Iowa Supreme Court’s Attorney Disciplinary Board in 2014 regarding his failure to advise a client on tax issues and a conflict of interest in the same case.
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