BATON ROUGE – A Baton Rouge tax preparer faces felony charges for a tax fraud scheme involving “ghost” companies and phony business losses that cost Louisiana taxpayers hundreds of thousands of dollars.

Joseph A. Gillies of Baton Rouge prepared and submitted hundreds of tax returns that contained fabricated business losses for companies that, in some cases, did not exist.

Numerous clients told investigators with the Louisiana Department of Revenue that they did not report any business losses when they provided Gillies with their tax records. Some whose tax returns contained fabricated business losses reported that they weren’t even business owners.

From 2012-2015, the alleged fraud scheme cost Louisiana taxpayers an estimated $768,740.

Phony business losses are a common technique used by unscrupulous tax preparers to lure clients with the promise of larger-than-expected income tax refunds.

Gillies was booked into the East Baton Rouge Parish Prison on Tuesday, Jan. 31, on charges of principal to filing or maintaining false public records and principal to illegal transmission of monetary funds. He is the 63^rd person arrested under a joint anti-fraud initiative of the Department of Revenue and the state Attorney General’s office.