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United States v. Demesmin

United States District Court, M.D. Florida, Orlando Division

December 7, 2017

UNITED STATES OF AMERICA, Plaintiff,
v.
YVES DEMESMIN, UNIK TAX REFUND, LLC, UJM TAX SERVICES, LLC, ELIE DORCEUS, LOYAL EXPERIENCE DEPENDABLE TAX SERVICE, LLC, LED FINANCIAL SERVICE, LLC, MARIO COOPER, DIA FLEMING, DIA I. FLEMING, LLC, YVESDEMESMIN, LLC and JOSEPH DEMESMIN, Defendants.

          ORDER OF PRELIMINARY INJUNCTION

          GREGORY A. PRESNELL, UNITED STATES DISTRICT JUDGE.

         This matter comes before the Court after a December 1, 2017 hearing on the Government's Motion For Preliminary Injunction (Doc. 61) (henceforth, the “Motion”). The deadline for filing a response to the Motion has passed, and no Defendant has done so. However, three Defendants - Joseph Demesmin, Mario Cooper, and Elie Dorceus - attended the hearing.

         I. Background

         The individual Defendants are tax preparers; the LLC Defendants are the entities through which the individual Defendants operate their tax preparation businesses. The Government contends that for the past several years the individual Defendants have prepared and overseen the preparation of federal income tax returns that create “large - but false - tax refunds through fabricated income, expenses, deductions, and credits.” (Motion at 2). Part of these excessive refunds would be paid to the preparer in the form of fees for preparing the return.

         On January 9, 2017, the Government file d the instant suit, seeking to enjoin the Defendants and those associated with them from participating in or associating with tax preparation pursuant to 26 U.S.C. § 7407 (Count I), 26 U.S.C. § 7408 (Count II), and 26 U.S.C. § 7402(a) (Count III). The Government also seeks disgorgement as to all Defendants pursuant to 26 U.S.C. § 7402(a).

         The Government contends that the Defendants have continued to prepare and oversee the preparation of false tax returns even after this suit was filed. On November 15, 2017 the Government filed the Motion, seeking a preliminary injunction that would, inter alia, prevent the Defendants from engaging in or assisting with tax preparation during the upcoming tax season. The meticulously documented Motion is accompanied by numerous exhibits, including dozens of depositions of individuals who had their re turns prepared by one of the businesses a t issue in recent years (Doc. 63-1 to 63-43). Generally speaking, those individuals testified that the preparers falsified the information on their returns without their knowledge in numerous ways, such as by mischaracterizing non-deductible expenses as deductible or by simply making up deductible expenses that the individual never actually incurred. Many of the deponents also testified that they were not provided with copies of their returns, and that the person they saw preparing their return did not sign it.

         Along with the depositions, the Government provided copies of the tax returns at issue, including financial records showing portions of the refunds being paid to the Defendants.

         On December 1, 2017, the Court held a hearing on the Motion. Only three of the individual Defendants appeared - Joseph Demesmin, Mario Cooper, and Elie Dorceus.[1] All three, appearing pro se, addressed the Court. While not admitting having participated in the preparation of false tax returns, none attempted to re but the Government's arguments. All three stated they had no intention of preparing taxes in the upcoming tax season.

         II. Legal Standards

         A. Preliminary Injunctions

         In determining whether preliminary injunctive relief is merited, the district court must consider whether the movant has established: (1) a substantial likelihood of success on the merits; (2) that irreparable injury will be suffered if the relief is not granted; (3) that the threatened injury outweighs the harm the relief would inflict on the non-movant; and (4) that entry of the relief would serve the public interest. Schiavo ex rel. Schindler v. Schiavo, 403 F.3d 1223, 1225-26 (11th Cir. 2005) (citations omitted).

         B. Injunctive relief vs . tax preparers

         The Government seeks injunctive relief in this case under several provisions of the Internal Re venue Code, including 26 U.S.C. § 7407, which authorizes the imposition of ...


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