Accountant charged in theft from clients, IRS

April 15, 2004|By Gail Gibson | Gail Gibson,SUN STAFF

Federal authorities arrested an Annapolis accountant yesterday on charges that he stole money from clients and defrauded the Internal Revenue Service on his own tax returns, collecting more than $130,000 in refunds that he was not owed.

Charles G. Fagan, 61, was released after an initial appearance yesterday in U.S. District Court in Baltimore, where Magistrate Judge James K. Bredar ordered Fagan not to perform any accounting-related work while awaiting trial.

Bredar told Fagan he could contact current clients, however, to advise them that they may need to request an extension for filing income tax forms. The deadline for filing state and federal tax returns is today.

A 16-count indictment against Fagan describes a series of schemes he is accused of devising to collect hefty tax refunds for himself and to divert the money of several clients to his own accounts.

In one instance, the indictment said, Fagan drained a commercial client's $100,000 rainy day account after acquiring blank checks that he forged as payable to himself.

When another client died, the indictment said, Fagan collected $43,000 from a trust company handling the woman's financial affairs after falsely claiming that she owed the money to the IRS.

In fact, the woman was owed a tax refund of more than $36,000. According to the indictment, when that check arrived, Fagan deposited it into a bank account for a bar operated by his son - after telling a bank official that it was payment for a party at the establishment.

Fagan also is accused of continuing to present himself professionally as a certified public accountant after his CPA license was revoked.

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