Grand Jury Returns Superseding Indictment Against Woodbury Tax Preparer

David B. Fein, United States Attorney for the District of Connecticut, today announced that a federal grand jury sitting in New Haven has returned a superseding indictment charging THOMAS THORNDIKE, 61, of Milford, with 23 counts of aiding and assisting the preparation of a false federal income tax return, four counts of making and subscribing a false tax return, and one count of obstruction of the administration of the Internal Revenue laws.

The superseding indictment was returned yesterday, September 22. On March 17, 2011, the grand jury returned an indictment charging THORNDIKE with 15 counts of aiding and assisting the preparation of a false federal income tax return and one count of obstruction of the administration of the Internal Revenue laws.

According to the superseding indictment, THORNDIKE was the founder and owner of Cornerstone Financial Services of Woodbury, LLC (“CFS”), a tax preparation and financial services business. As the owner of CFS, THORNDIKE prepared federal tax returns for individuals and businesses in exchange for payment of a fee. THORNDIKE also offered individuals to whom he provided tax preparation services an opportunity to purchase audit insurance. Purchasers of audit insurance could elect to be represented by THORNDIKE in connection with any Internal Revenue Service audit of their individual federal income tax returns.

The superseding indictment alleges that, in the course of preparing many of his clients’ tax returns, THORNDIKE improperly reduced the amount of tax due in a variety of ways, including falsely claiming deductions for charitable contributions, and falsely claiming deductions for job expenses.

The superseding indictment adds charges relating to several alleged fraudulent deductions on tax returns that THORNDIKE prepared for his two sons. On the returns, it is alleged that THORNDIKE improperly identified cash payments from him to his children as wages, and then falsely claimed that his sons had incurred business and employee expenses, reducing the amount of tax due.

The superseding indictment also adds charges related to THORNDIKE’s personal tax returns for the 2005 through 2008 tax years. It is alleged that THORNDIKE claimed hundreds of thousands of dollars in improper business deductions, including, but not limited to, wage expenses for his children, which actually were personal payments to them; a $25,000 payment for a Cadillac Escalade for one of his children; more than $12,000 in personal carpentry work; and a $27,983 “sale of business property” loss stemming from THORNDIKE’s selling of an engagement ring after his marriage engagement had broken off.

The superseding indictment further alleges that, in December 2008, the IRS notified THORNDIKE that he was the subject of an IRS audit examining his preparation of tax returns for the tax years 2006 and 2007. In connection with the audit, THORNDIKE assisted in the preparation of, and then submitted to the IRS, falsified documents to support the false deductions claimed on tax returns that were subject to the audit.

THORNDIKE has been released on a $400,000 bond following his arrest in March 2011.

If convicted, THORNDIKE faces a maximum term of imprisonment of three years and a fine of up to $250,000, on each count.

U.S. Attorney Fein stressed that an indictment is not evidence of guilt. Charges are only allegations, and each defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.

This case is being investigated by the Internal Revenue Service - Criminal Investigation and the Federal Bureau of Investigation. The case is being prosecuted by Assistant United States Attorneys Eric Glover and Christopher Mattei.