Tax preparer indicted
for illegal refunds

Petala Lakatani's clients
are still liable for the money
they collected fraudulently

An Oahu grand jury has indicted a tax preparer this week with preparing false and fraudulent returns for clients that resulted in thousands of dollars erroneously refunded to hundreds of taxpayers.

While tax preparer Petala Lakatani faces criminal charges, the taxpayers who received the refunds are responsible for paying back all the taxes, with applicable penalties and interest, state tax officials said.

Lakatani was charged Wednesday with 44 counts, including preparing false and fraudulent tax returns and second-degree theft. He allegedly claimed excessive itemized deductions on returns he prepared for clients during tax years 2001, 2002 and 2003, the Department of Taxation said.

Preparing false and fraudulent returns and second-degree theft are punishable upon conviction with a fine of up to $100,000 and/or prison of up to three years for each violation.

Earlier this month, the Department of Taxation also filed a criminal complaint against the president of two auto repair businesses. Michael H. Chong was charged with failing to file annual general excise tax returns for his two companies, Unibodytech LLC and Extensive Enterprises Inc., between 1997 and 2001. The businesses were also charged with failure to file general excise tax returns.

Failure to file is a misdemeanor punishable by a fine of up to $25,000 and/or prison of up to one year. A corporation can be fined up to $100,000 for each year. Chong is expected to be arraigned in Honolulu District Court on April 15.