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CPA Guilty in Investment Fraud

 A Nevada CPA has pleaded guilty to selling tax deduction in exchange for investing in a real estate business he owned.  Lance K Bradford, whose scheme cost the Internal Revenue Service $8 million, pleaded guilty to aiding and assisting the filing of false tax returns.

Bradford, founder and manager of LL Bradford & Co., also operated a real estate business, operating and controlling a real estate investment partnership entity.

In 2011, he offered high-net-worth clients the opportunity to pay his partnership entity and receive tax deductions of approximately five to seven times the amount of money “invested.” Bradford told clients the payments entitled claim deductions based on losses from the partnership.

The Department of Justice noted tax laws do not permit the sale of deductions in exchange for an investment, nor did it incur losses or depreciation as large as the amount Bradford sold. He also did not report the investments as losses on client tax returns instead having their returns report fake deductions for cost of goods sold, professional and consulting fees or nonpassive losses.

In 2014, Bradford asked one client to make a $417,780 investment for depreciation-based losses to be put on the client’s 2013 Form 1120S. Instead, Bradford’s firm inflated the company’s cost of goods sold by $2,110,000, which cost a tax loss of about $860,627.

Bob Scott
Bob Scott has provided information to the tax and accounting community since 1991, first as technology editor of Accounting Today, and from 1997 through 2009 as editor of its sister publication, Accounting Technology. He is known throughout the industry for his depth of knowledge and for his high journalistic standards.  Scott has made frequent appearances as a speaker, moderator and panelist and events serving tax and accounting professionals. He  has a strong background in computer journalism as an editor with two former trade publications, Computer+Software News and MIS Week and spent several years with weekly and daily newspapers in Morris County New Jersey prior to that.  A graduate of Indiana University with a degree in journalism, Bob is a native of Madison, Ind
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