A federal district court in Ohio has issued a permanent injunction ordering ITS Financial LLC, the parent company of Instant Tax Service tax franchiser, to cease operations. The order, which was issued as a result of a two-week trial in June, also bars Fesum Ogbazion, the sole owner and CEO of ITS Financial, from operating or being involved with any business relating to tax-return preparation.
ITS Financial, which claims to be the fourth largest tax-preparation business in the country, had more than 150 franchisees that filed more than 100,000 tax returns each year in 2011 and 2012. Ogbazion also
owned two other entities, Tax Tree LLC and TCA Financial LLC, that were also shut down.
The Justice Department cited a long list of the company’s transgressions, including:
The court cited an IRS study that showed that the tax harm the company’s franchisees caused in just five cities during a single filing season was between $10 million and $25 million. The company also had failed to
comply with the terms of a preliminary injunction order that the company had agreed to in October 2012.
In a Justice Department press release, Assistant Attorney General Kathryn Keneally said of the company, “As described by the court, this company grew large through abhorrent means—filing returns without customer authorization, forging customer signatures, pushing fraudulent loan products, and much more. As the court’s decision recognizes, a business model based on false and fraudulent conduct cannot be allowed to prevail.”
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