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Instant Tax Service Franchisor Convicted of Conspiracy, Fraud, Other Related Crimes

Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Department of Justice Tax Division announced June 5, 2017 that a federal jury convicted the owner of Instant Tax Service franchise in Dayton, Ohio of conspiracy to commit wire fraud, bank fraud, evasion of employment taxes and failure to pay employment taxes.

Evidence presented at trial showed Fesum Ogbazion, 44, owner and CEO of ITS Financial LLC, founded the national tax preparation chain in 2004, which at one time operated more than 1,100 franchise locations throughout the United States.

Sentencing will be set at a later date. Ogbazion faces a statutory maximum sentence of 20 years in prison on the conspiracy count, 20 years in prison for the wire fraud counts, 30 years in prison for bank fraud, five years in prison for tax evasion and five years in prison for failure to pay over employment taxes. He also faces a period of supervised release, restitution and monetary penalties.

Evidence further reports that from approximately January 2009 through 2012, Ogbazion conspired with others at ITS to generate loan and tax return preparation fees for ITS and its franchises by luring taxpayers into ITS franchises through a fraudulent nationwide advertising campaign. The Justice Department report explains, "The ITS ads offered tax refund anticipation loans through an independent third-party lender, despite the fact that ITS did not have such a lender to fund the promised loans. The evidence introduced at trial established that Ogbazion used the false advertising campaigns to entice customers into coming to ITS locations for a loan and then used their loan applications to prepare and file income tax returns – often without customers' authorization. ITS charged its customers between $500 to $800 in tax preparation fees. Between 2006 and 2011, ITS collected more than $70 million in fees."

Ogbazion also failed to pay approximately $1.3 million in payroll taxes due from ITS and another business during four tax quarters in 2009 and 2010. The franchisor then evaded the Internal Revenue Service's attempts to collect the unpaid taxes by directing business revenue to nominee accounts, placing assets in the names of nominee entities and making false statements to an IRS revenue office during the course of collection activity.

The Department of Justice stated that in 2013 ITS Financial and Fesum Ogbazion were permanently barred from operating or being involved with any work or business relating to the preparation of tax returns. Instant Tax Service continues to operate its website and publicize its services.


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About Janet Sparks

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Public Profile

Janet Sparks is the former publisher of the Continental Franchise Review, an industry newsletter that covered the franchise community for over 30 years. She has also been a columnist for a leading franchise magazine for the past 13 years. Today she is an independent journalist who engages in investigative reporting, tackling complex issues that impact the franchise industry.

Janet can be reached at jsparks@bluemaumau.org or at 303-799-7398.