Public Safety

Muscatine tax attorney sentenced to over 3 years in federal prison for mail fraud

Filed false tax claims for clients, pocketed money for himself

A Muscatine tax attorney was sentenced to more than three years in federal prison for filing false tax returns for clients and keeping the illegal refunds for himself.

Soo-Hyun Jung, also known as Jay Jung, 46, of Coralville, pleaded guilty in August in U.S. District Court in Davenport to two counts of mail fraud and one count of making false claims to the U.S. Treasury Department.

Jung, formerly a lawyer with Nepple Law Firm in Muscatine, was sentenced Wednesday to 38 months in prison, according to court documents. A judge also ordered him to pay more than $618,000 in restitution to the victims and to serve three years of supervised release.

During the plea hearing in August, Jung admitted to a scheme involving filing tax returns for “R.M.,” as identified in court documents, after receiving 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 2002-2013, 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 hearing that he forged 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.

Jung deposited tax refunds of $202,180 for tax years 2003 and 2004 in a Nepple Law trust account on Oct. 2, 2015, according to the plea. He also deposited tax refunds in the trust account on Oct. 9, 2015, for $49,707. Then on Oct. 16, he issued a check for $236,886 from the trust account to Wells Fargo so he could buy a cashier’s check payable to R.M. and himself.

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During the scheme, Jung bought a cashier’s check with the illegal funds 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 financial services company Vanguard to give Jung access to his account and tax information, the plea shows. 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 the check into a Nepple Law trust account.

On May 27, 2016, Jung issued a check for $199,000 from the trust account to Wells Fargo to buy a cashier’s check, which was payable to C.T. or himself.

Court documents show the victims’ loss from the scheme totaled $618,022.

Jung received a 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.

The Internal Revenue Service Criminal Investigation Division investigated this case, and the U.S. Attorney’s Office for the Southern District of Iowa prosecuted it.

l Comments: (319) 398-8318; trish.mehaffey@thegazette.com

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