The owner of Litigation Support Services, LLC, Michael Ray, was arrested today by South Carolina Department of Revenue (SCDOR) investigators on several charges. The Myrtle Beach business owner is accused of preparing false tax returns, tax evasion, forgery, and breach of trust.
Assisting in the Preparation of False Tax Returns
For tax years 2011 and 2012, Ray is charged with four counts of assisting in the preparation of false tax returns. The defendant knowingly and intentionally prepared false returns without the consent of his clients. In two cases, he under reported the clients' total income. In the other two cases, Ray reported deductions when the clients were not entitled to them. If convicted, the defendant faces fines up to $500 and/or up to five years in prison per charge.
Ray is also charged with three counts of tax evasion. In 2012, the defendant earned approximately $183,925 but only reported a total income of $1,154 on his tax return. He evaded paying more than $7,000 in taxes due to the state. In 2013 and 2014, Ray failed to timely and voluntarily file his tax returns and evaded paying an additional $9,734 in taxes. If convicted, he faces fines up to $10,000 and/or up to five years in prison per charge.
For tax years 2011 through 2014, Ray is charged with four counts of forgery. Without the knowledge or consent of his clients, Ray wrote and deposited checks to his business for more than $10,400 from his clients' accounts. If convicted, Ray faces fines at the discretion of the court and/or up to five years in prison per charge.
Breach of Trust
Ray is also charged with one count of breach of trust with fraudulent intent. In 2013, the defendant took $5,524.81 entrusted to him from a business he was a shareholder in and deposited the money into his own bank account for personal use. If convicted, Ray faces fines at the discretion of the court and/or up to five years in prison.
Ray is currently being held at the J. Reuben Long Detention Facility. The Myrtle Beach Police Department assisted with the arrest.
The SCDOR is committed to the fair administration of tax laws. By taking enforcement action against noncompliant taxpayers, the Department seeks to prevent unfairly increasing the tax burden on those who do comply.