Accountant’s numbers
don’t add up, feds say

By William Kenny
Times Staff Writer

By day, Robert Trauffer has been a key cog in an organization responsible for nursing countless Northeast Philadelphia residents back to health.
But in his spare time, the Frankford Hospitals executive and certified public accountant falsely inflated the financial health of dozens of clients at the expense of federal taxpayers, according to new criminal charges against him.
Last Thursday, U.S. Attorney Patrick Meehan announced a 38-count federal grand jury indictment accusing Trauffer, 47, of Spring City, with income tax evasion and filing false tax returns. He allegedly cheated the government out of more than $189,000 from 2001 and 2004.
If convicted, he faces a possible 122-year prison sentence and $250,000 fine.
Trauffer was one of seven tax preparers charged in five unrelated indictments announced by Meehan on the same day.
Trauffer’s alleged illegal activity was limited to his private practice as an income tax return preparer and independent of his official functions as director of business operations for Frankford Hospitals.
In a printed statement issued later on Thursday, the hospital announced that Trauffer had been suspended with pay effective immediately "pending a full investigation."
"Frankford Hospital is confident that the matter will be appropriately investigated and adjudicated through the U.S. Department of Justice," the statement read.
Trauffer has worked for Frankford for 23 years.
According to the indictment, Trauffer underreported his income from his tax form preparation activities to the tune of $379,809 from 2001 to ’04, resulting in a shortfall of $136,851 in tax payments.
Meanwhile, the court documents allege, his tax preparation business grew rapidly as word spread of his ability to get large refunds for clients. Many of Trauffer’s clients were police officers and firefighters. None of his clients have been charged criminally, although many have been forced to repay owed taxes and penalties.
"The majority of (his) clients were referred to him by word of mouth," the indictment states. "Many of his clients retained (him) to prepare their returns because he was knowledgeable in tax preparation for persons in their professions and obtained significant refunds for them."
Trauffer’s practice increased from 390 returns in 2002 to 670 in 2003 and 1,025 in 2004, the indictment states. Among those, the grand jury identified 34 false returns with additional tax due ranging from $281 to $3,240. The total tax loss for the false returns was $52,465.
Trauffer allegedly exaggerated deductions for charitable contributions and for unreimbursed job expenses on the false returns often without supporting documentation, such as receipts, and without the knowledge of the clients.
He generally provided clients with copies of their returns after filing them electronically with the IRS. ••
Reporter William Kenny can be reached at 215-354-3031 or bkenny@phillynews.com