|
Accused of blatant fraud, Lexington accountant Donald Ondrak should be banned from ever doing income tax work again, the U.S. Department of Justice says. Ondrak is accused of devising “blatantly fraudulent” tax avoidance schemes from 2004-07, and even continuing to do so in the face of IRS audits and fines, according to a 20-page compliant filed by the U.S. Attorney’s Office Sept. 21 in U.S. District Court. Ondrak has operated a Lexington accounting firm since 1983. The IRS studied 400 tax returns that Ondrak prepared from 2004-07. On average, the income tax due on each return was $6,875 less than it should have been, totaling $2.8 million in tax underpayments. The IRS did not study several thousand more of Ondrak’s returns, so the total loss to the government could be in the tens of millions. Clients named in the complaint include a home medical supplier, several farms, a real estate business, a surgeon and a dentist. Ondrak allegedly created sham corporations and W-2 earnings statements, claimed false business deductions and sham transactions between related parties.
Penalties Twice, Ondrak has had to pay the IRS penalties for fraud, but he kept on committing fraud anyway, according to the complaint. “His persistence in claiming improper deductions even after becoming aware of increased IRS scrutiny…all establish that the misconduct… is likely to recur unless Ondrak is permanently enjoined from preparing tax returns,” the complaint says. In 2004, Ondrak underreported the wages he paid to employees Deborah Haseloh and Cheryl Luft by creating a sham company named Automated Financial Services and paying both of the employees $22,252 in dividends, instead of wages, from the sham company, the complaint says. The IRS found out about it and penalized Ondrak nearly $8,000 in 2007, which he paid. Ondrak could be subject to other, unspecified civil penalties. Also, the U.S. Attorney wants Ondrak to give the IRS with a complete list all his customers, and to notify all his customers in writing of any findings of fraudulent activity.
Some clients Among Ondrak’s clients named in the complaint are Frontier Home Medical of Cozad, owned by Greg Cornelius; Scott McPheeters and Floyd Wahlgren of Gothenburg; dentist Dan McClenahan of Overton; surgeon Kerry Buser of Lexington; Nebraska Land and Cattle Agency, a real estate company owned by Richard and Barbara Dawson of Elwood; William and Valerie Geiger of Cozad; Gary and Kathryn Enochs of Overton and Daniel Nelson of Bertrand. None of the clients are accused of wrongdoing in the complaint.
Some particulars According to the complaint: • For surgeon Kerry Buser, Ondrak understated his earnings by $904,000 over three years, from 2004-06. • For the Dawsons, in 2004 Ondrak understated the salary their real estate company paid them by $157,818. • For McClenahan, Ondrak reported the dentist earned only $18,000 a year instead of $70,000 a year.
| 
Quick Links
