The following examples of questionable refund program fraud investigations are excerpts from public record documents on file in the court records in the judicial district in which the cases were prosecuted.

Georgia Woman Sentenced to 30 Months in Prison for Providing Fraudulent W-2's Used to File False Tax Returns

On September 26, 2007, in Atlanta, GA, Marla Nicole Wells was sentenced to 30 months in prison, to be followed by three years of supervised release, and ordered to pay $222,597 in restitution. Wells was convicted on June 27, 2007, on charges of conspiring to defraud the United States by assisting others in filing false claims for income tax refunds with the Internal Revenue Service (IRS). According to information presented in court, beginning in January 2002 and continuing through August 2004, Wells conspired with others to electronically file tax returns for approximately 59 individuals, claiming refunds to which they were not entitled. Wells enlisted the assistance of recruiters to find people who were willing to file fraudulent tax returns, paying the recruiters a small fee.  Once found, Wells provided the “filer” with a false W-2 that she created listing employers for whom the individuals filing the fraudulent tax returns had never worked, including her own full-time employer, BellSouth.  To ensure that she got her fees, plus a portion of the fraudulent refund, Wells directed "filers" to seek refund anticipation loans, and occasionally accompanied the "filer" to the bank to get the money or held their identification until they returned to her with the money.  The “filers” were often indigent or had very low income.  On at least one occasion, Wells deposited the fraudulently obtained refund anticipation loan proceeds into her own bank account.  She used some of her ill-gotten gains to purchase a luxury Mercedes automobile.

Three Sentenced in Tax Fraud Scheme in Saipan

On September 24, 2007, in Saipan, Antonieta Bonifacio Aguon and Peter M. Rogolifoi were sentenced for their roles in a scheme to submit false claims against the United States.  Aguon was sentenced to 22 months in prison, to be followed by three years of supervised release, and ordered to pay $5,546 in restitution to the Internal Revenue Service (IRS).  Rogolifoi was sentenced to 18 months in prison, to be followed by three years of supervised release, and ordered to pay $5,177 in restitution to the IRS.  Additionally, on September 21, 2007, Dianne Marie Redor Sablan was sentenced to seven months in prison, to be followed by three years of supervised release, and ordered to pay $12,277 in restitution to the IRS.  All three defendants were ordered to pay a $100 assessment fee.  During May and June 2007, Aguon, Rogolifoi, and Sablan each pleaded guilty to one-count Informations charging them with conspiring to submit false claims against the United States.  According to court documents, Aguon, a citizen of the Philippines and present in the Commonwealth of the Northern Mariana Islands (CNMI) as an Immediate Relative, began preparing fraudulent United States income tax returns for CNMI residents falsely claiming the Earned Income Tax Credit (EITC) by providing fictitious United States addresses.  She conspired with recruiters, who brought her taxpayer information, including names, social security numbers, bank account information, Forms W-2 and fictitious United States addresses.  Aguon continued preparing and submitting false tax returns until she was approached by special agents of IRS Criminal Investigation in April 2007.  Over a two year period, Aguon prepared approximately 275 false returns, resulting in a loss to the United States of approximately $850,000.

Four Defendants Sentenced in Refund Fraud Scheme; Ordered to Pay Over $530,000 in Restitution

On September 21, 2007, in Macon, GA, Joseph Jordan, Sr., was sentenced to 135 months in prison, to be followed by three years of supervised release.  Jordan and his co-defendants, Eretta Nelson, Ozee Rogers, Sr., and Hewis Cross, were convicted following a jury trial on January 30, 2007, of conspiracy to file false claims for refunds with the Internal Revenue Service (IRS) and of multiple counts of filing or causing false claims for refunds to be filed with the IRS.  On September 7, 2007, Nelson was sentenced to 70 months in prison; Rogers was sentenced to 108 months in prison; and Cross was sentenced to 51 months in prison.  In addition, they were ordered to pay $530,663 in restitution to the IRS and each was ordered to serve a term of three years of supervised release following their terms of imprisonment.  Evidence at trial proved that the defendants were the promoters and recruiters for a scheme to file false claims for refunds with the IRS.  The defendants falsely told taxpayers that the IRS secretly places taxes paid by individuals into interest bearing accounts and that they had access to inside information relating to how these funds could be obtained through the filing of amended tax returns.  Recruited taxpayers filed false amended tax returns claiming tax refunds to which they were not entitled ranging from $33,913 up to $89,612.  Evidence at trial showed that 95 of these false claims were filed with the IRS totaling $5,672,093.

Mother and Sons Sentenced in Fraudulent Refund Scheme Conducted from Florida Prison

On September 18, 2007, in Jacksonville, FL, three defendants were sentenced for their roles in a scheme to defraud the Internal Revenue Service (IRS) through the filing of false tax returns.  William Koster was sentenced to 46 months in prison; Rolando Valencia, Koster's brother, was sentenced to 30 months in prison; and Noris Keller, Koster and Valencia's mother, was sentenced to four months in prison and four months home detention.  In addition, all of the defendants will be placed on three years of supervised release following their imprisonment and were ordered to pay approximately $32,000 in restitution to the IRS.  According to court documents, from February 2003 through September 2003, Koster, Valencia, and Keller operated a scheme to obtain fraudulent income tax refunds by preparing and filing false federal income tax returns in the names of Florida inmates.  Koster, who was then an inmate at Okeechobee Correctional Institution, obtained the names and social security numbers of other inmates and provided this information to Valencia, along with instructions regarding how to prepare tax forms and numeric figures to be used on the forms which the defendants referred to as “recipes.”  Valencia then prepared and filed false tax returns with the IRS using the information provided by Koster.  Keller opened a private mail box in Jacksonville, which was used as the address on many of the returns, and to which the fraudulent refunds were to be sent.  Keller monitored receipt of the refund checks and converted them to cash.  During the course of the scheme, the defendants filed more than 100 false tax returns with the IRS seeking fraudulent refunds totaling more than $580,000.

Tulsa Woman Sentenced in Theft of Tulsa Police Department Records and Tax Fraud

On August 22, 2007, in Tulsa, OK, Diana Brice, aka “Little Di,” was sentenced to 37 months in prison, to be followed by three years of supervised release and ordered to pay $133,571 in restitution to the Internal Revenue Service (IRS).  She pleaded guilty on February 14, 2007, to conspiracy charges relating to the theft of personal identification and information from the police department’s confidential criminal information system, and to conspiracy charges related to the filing of fraudulent and fictitious federal income tax returns.   Brice’s daughter and co-defendant, DeShon Stanley, aka “Shorty,” while employed as a records clerk with the Tulsa Police Department, used the department’s criminal records system (TRACIS) to retrieve information.  She has pleaded guilty to stealing confidential information from police records and awaits sentencing.  The tax conspiracy charges stems from Brice’s scheme to broker children’s identity information and provide that information to others to claim as dependants on their federal income tax returns, in order to receive inflated tax returns and earned income credits. Five other individuals who participated with Brice in the tax fraud scheme have also been found guilty and were sentenced on August 15, 2007.   The individuals, including a local tax preparer, submitted and/or helped a number of other individuals prepare fraudulent 1040 and 1040A forms that were submitted to the IRS over a five year period from 2001-2005.  Sam Willis, operating Willis Tax & Financial Services, was sentenced to five years of probation, six months on home detention with electronic monitoring, and ordered to pay $47,770 in restitution. Brenda Carter was sentenced to five years of probation and ordered to pay $9,568 in restitution.  Stacy Friday was sentenced to five years of probation, six months of home detention and ordered to pay $14,715 in restitution.  Latonya Owens received five years probation, six months on home detention, and ordered to pay $18,229 in restitution.  Mickeul Tyson received five years probation, four months on home detention, and ordered to pay $10,410 in restitution.

Former Tax Prep Service Employee Sentenced to 60 Months in Prison

On August 20, 2007, in Houston, TX, Yvette M. Cooper, a former employee of Jackson Hewitt and ExpressTax, was sentenced to 60 months in prison for preparing false income tax returns for her clients.  At a hearing in February 2007, Cooper admitted that during 2003 and 2004 she prepared approximately 109 federal income tax returns on which she falsely claimed fuel tax credits totaling $842,248 for her customers who did not qualify for the credit.  The Fuel Tax Credit is a refundable credit for certain nontaxable uses of fuel, including on a farm for farming purposes and for off-highway business use.  Cooper worked as a return preparer for Jackson Hewitt during 2003 and as a return preparer for ExpressTax during 2004.  In her plea agreement, Cooper admitted she added the fraudulent fuel tax credits to her customers’ tax returns in part to gain more customers and also because she received tips, ranging from $100-400, from her customers who received the refunds.  Cooper further admitted she falsely claimed fuel tax credits totaling $47,131 on her husband’s tax returns for 2002 and 2003 and falsely claimed a fuel tax credit of $21,305 on another customer’s tax return.  According to the plea agreement, Cooper admitted none of her customers provided her any information that would have led Cooper to believe the customer qualified for the fuel tax credit.  As part of her plea, Cooper has agreed to make full restitution to the taxpayers and the IRS, the victims of her conduct.

Woman Sentenced for Aiding and Assisting in Preparing False Federal Tax Returns

On July 19, 2007, in Los Angeles, CA, Dawn Nicole Carrier was sentenced to 36 months in prison, to be followed by one year supervised release and ordered to pay $7,737 in restitution.  An indictment was returned against Carrier in April 2005 with the filing of false claims on 42 income tax returns.  The tax returns contained false information including fictitious wages, federal withholdings and inflated “Schedule A” expenses which increased the taxpayer’s refund.  Carrier pleaded guilty on August 10, 2005 to one-count of aiding and assisting in the preparation of false federal tax returns. 

West Virginia Woman Sentenced for Filing False Tax Return

On July 13, 2007, in Clarksburg, WV, Bertha “Peaches” Horton was sentenced to 30 months in prison and ordered to pay $6,089 in restitution for submitting a false claim to the Internal Revenue Service.  Her sentence runs concurrently with a sentence she currently serves for the state of West Virginia.  Horton pleaded guilty in April 2007 to helping a person file a false 2001 federal tax return.  She admitted to: submitting a fraudulent Form W-2, “Wage and Tax Statement”, reporting wages and withholding not earned or paid, and fraudulently claiming a dependent child in order to quality for the Earned Income Tax Credit.

Detroit Resident Sentenced on Conspiracy to Defraud IRS

On July 12, 2007, in Detroit, MI, Martez Djuan Junior was sentenced to 12 months in prison following his conviction for conspiracy to defraud the Internal Revenue Service.  Junior pleaded guilty to conspiring with another individual to file fraudulent federal income tax returns.  Junior created false Forms W-2 in the name and social security number of recruited individuals and fabricated the employer’s name and amount of tax withholdings.  The filer then provided the fictitious documents to a legitimate tax preparer, who prepared and electronically filed the false tax return. The filer applied for refund anticipation loans, which allowed the recruited individual to receive a cash advance on the false tax refund.

Husband and Wife Sentenced in Tax Refund Scam

On July 9, 2007, in Columbia, SC, Randall "Chad" Pardue was sentenced to 63 months in prison and his wife, Kelly Kay Pardue, was sentenced to 24 months in prison.  The couple was also ordered to pay more than $102,300 in restitution.  According to court documents, between January 2004 and March 2005, the Pardues developed a scheme to generate and file false income tax returns to obtain refunds from the IRS.  Chad Pardue, then an inmate at the South Carolina Department of Corrections, collected the names, addresses, and social security numbers of other inmates and sent them to his wife, Kelly Pardue.  Using the information provided by Chad, Kelly created false W-2 forms, making the inmates appear as paid employees of local businesses.  She then prepared false income tax returns seeking refunds based on the false W-2 information, and filed the phony documents with the IRS.  During the course of the conspiracy, approximately 86 false returns were submitted seeking refunds of nearly $500,000.  Chad Pardue will begin his federal prison term following his release from state prison in 2011.  He is currently serving a 15-year sentence for burglary.

Seattle Man Sentenced to Two Years in Prison for Tax Fraud Scheme

On July 6, 2007, in Seattle, WA, Mark Anthony Ford was sentenced to 24 months in prison, to be followed by three years of supervised release, and ordered to pay $42,100 in restitution.  Ford pleaded guilty in April 2007 to conspiracy to defraud the United States by filing false claims for refunds.  According to documents filed in the case, Ford recruited other people ("filers”) to file fraudulent tax returns in their own names, addresses and social security numbers.  Ford created or obtained false Forms W-2, with fabricated amounts of tax withholdings, in the names and social security numbers of the filers.  Additionally, Ford caused the filers to claim dependents on their tax returns in order to fraudulently obtain the Earned Income Tax Credit (EITC).  Ford knew that these filers were not entitled to the EITC either because the named dependents were not actual dependents of the filer, or because the wages reflected on the returns were reported in fraudulent amounts permitting the unlawful application of the EITC.  The amounts claimed by Ford totaled over $54,000, and involved federal income tax returns filed between January 2003 and February 2004.

Ohio State Prison Inmate Sentenced in Fraudulent Refund Fraud Scheme

On July 3, 2007, in Akron, OH, Ronald Dean Wells was sentenced to 32 months in prison and ordered to pay $56,189 restitution to the Internal Revenue Service.   Wells pleaded guilty to conspiracy to defraud the United States, involving his preparation of numerous false tax returns while in Ohio prisons.  In his plea agreement, Wells acknowledged that he obtained the names and Social Security numbers of various other State of Ohio prisoners, in most cases without their knowledge, and used that information to prepare false tax returns claiming tax refunds based on fictitious wages and tax withholdings. With each return, Wells attached a false and fictitious substitute W-2 form, purportedly prepared and signed by the claimant, setting forth an amount of wages supposedly paid and taxes withheld by the claimant’s employer, and the purported reason why the claimant did not receive a W-2 form from the employer.  Wells fabricated the wage and withholding information, generally forged the claimants’ signatures, and listed other persons’ addresses on the returns.  Wells arranged for persons outside of prison to assist him in the conspiracy.  For the tax years 2000 and 2001, Wells caused 35 fraudulent income tax returns to be filed with the IRS, containing combined false and fictitious tax refund claims totaling $236,851.  

Jacksonville Conspirators Sentenced for Filing False Claims for Refunds Using a Jackson Hewitt Tax Service

On June 25, 2007, in Jacksonville, FL, Vinlencia Brooks and Dessie Pollard, Jr., were sentenced for their roles in a conspiracy to defraud the Internal Revenue Service by filing false tax returns.  Brooks was sentenced to 30 months in prison, to be followed by three years of supervised release; Pollard was sentenced to six months in prison and six months home detention as a condition of three years of supervised release.  Brooks, Pollard, and a third co-conspirator, Jimmy Henderson, all pleaded guilty in February 2007.  Henderson was sentenced to three years probation, with a condition of 180 days home detention.  According to court documents, early in 2002, Pollard and Henderson were tax preparers at a Jackson Hewitt Tax Service office located in Jacksonville. Vinlencia Brooks prepared false W-2 Forms, using the names and social security numbers of various individuals. The W-2s stated false employment and false amounts of tax withholdings.  Brooks provided the false W-2s to Pollard and Henderson at the Jackson Hewitt office.  They prepared false tax returns based on the W-2s and electronically filed the returns with the IRS.  The co-conspirators shared the refunds which amounted to more than $92,204.

Former Tax Return Preparer Sentenced in Federal Tax Violations Case

On June 5, 2007, in Minneapolis, MN, Yvonne Delores Garth, formerly known as Yvonne Caldwell, was sentenced to 57 months in prison and ordered to pay $163,306 in restitution.  She had been found guilty of multiple charges of conspiracy to defraud the United States and of aiding and abetting false claims.  Between January and March 2002, Garth, who was a tax return preparer, created bigger refunds than her clients were entitled to receive by using false income and withholding amounts.  She also overstated deductions for medical expenses, charitable contributions and employment expenses in order to reduce the amount of taxes owed and to increase tax refund amounts.  On at least one occasion, she intercepted a refund check, forged the filer’s signature on it and signed the check over to her daughter.  As a result of her criminal activity, more than $100,000 in false claims was submitted to the IRS.

Miami Return Preparer Pleads Guilty to Claiming Fraudulent Telephone Excise Tax Refunds

On June 5, 2007, in Miami, FL, Equilla McRae, aka Equilla Edwards, aka Equilla Givens, pleaded guilty to one count of making and presenting fraudulent federal income tax refund claims to the Internal Revenue Service (IRS).  According to the plea agreement, McRae agreed to pay restitution in the amount of $179,369 to the IRS.  McRae was indicted on April 19, 2007, charged with 25 counts of making, presenting and assisting others in preparing and presenting fraudulent claims for refunds to the IRS.  According to the indictment, McRae prepared, filed and assisted others in preparing and filing approximately 25 fraudulent income tax returns which resulted in fraudulent tax refund claims of approximately $142,265.  During the investigation, in February 2007 a search warrant was executed at Fatima's Just Taxes Inc. (FJT) which was simply a cover name that McRae used to facilitate the false refund scheme which she operated from her home.  According to the affidavit in support of the application for the search warrant, the IRS Fraud Detection Center in Ogden, Utah, identified numerous income tax returns filed by FJT that contained fraudulent telephone excise tax refund (TETR) credits.  According to court records, the IRS discovered that 25 of the 2006 Forms 1040 prepared by McRae included information that McRae knew was false, e.g., inflated wages, fabricated Forms W-2, fictitious dependents and egregiously excessive TETR credits unsubstantiated by any documentation.  In the majority of the returns that McRae prepared claiming the TETR credit, she reported refunds for thousands of dollars, an amount so disproportionately large it implied that the client taxpayer, whose annual income she typically reported to be in the $9,000 to $15,000 range, had spent multiples of a hundred thousand dollars just on phone services between March 2003 and June 2006.

Defendant Sentenced to 24 Months in Prison for Filing False Refund Claims

On June 4, 2007, in Los Angeles, CA, Nicholas Henderson was sentenced to 24 months in prison to be followed by three years of supervised release.  In his plea agreement, Henderson admitted to filing at least 57 false or fraudulent claims for income tax refunds with the Internal Revenue Service.  Henderson filed false 2001 through 2003 federal income tax returns claiming refunds which he knew the individual named as the filer of the tax return was not entitled to receive.  To accomplish this, Henderson used false Forms W-2, filed fraudulent claims for education credits, fabricated employers, provided false dependent information and claimed earned income credits to which the named filers of the returns were not entitled.  In addition to facing a prison sentence, Henderson has agreed to forfeit to the government approximately $122,135 in cash that investigators seized from his residence and safe deposit boxes as a part of the investigation.  Henderson set forth in his plea agreement that the actual losses his scheme cost the government was at least $199,917.

San Bernardino Woman Sentenced to 24 Months for Filing False Tax Returns

On June 1, 2007, in Los Angeles, CA, Bonita Garcia Deleon was sentenced to 24 months in federal prison to be followed by three years of supervised release.  In December 2006 Deleon pleaded guilty to filing at least 36 false income tax returns with the Internal Revenue Service in the names of people without their knowledge.  According to her plea agreement, Deleon admitted that she knew that at the time she filed the returns claiming the tax refunds, the returns were false.  Specifically, the tax returns prepared and filed by Deleon falsely claimed income tax refunds based upon fictitious information she included on the returns, including false addresses, salary and wage amounts, fake dependents and false earned income tax credits.  Additionally, Deleon prepared the returns including false signatures for the purported taxpayers.  In total, Deleon claimed at least $81,873 in income tax refunds to which she was not entitled to receive from the IRS.

Defendant Sentenced in Identity Theft and Tax Refund Fraud Case

On May 30, 2007, in Columbia, SC, Brett Shannon Johnson was sentenced to 75 months in prison, three years supervised release and ordered to pay $346,451 in restitution to victims of his fraud schemes.  Johnson pleaded guilty on February 20, 2007, to two separate schemes to defraud.  In the first, he purchased luxury items such as watches, jewelry and coin collections over an internet auction site from unsuspecting persons.  He then convinced these persons to ship the items COD (cash on delivery) to an address near his Charleston, SC, apartment.  The location of the shipping address enabled Johnson to make contact with the shipping companies when they attempted delivery.  When the items arrived, Johnson gave counterfeit bank cashier’s checks to the shipping company.  Nine people were victimized by this scheme for a total of $83,259.  After he was arrested on these charges, Johnson began to cooperate with federal law enforcement agents on another investigation that was designed to identify and prosecute individuals who engage in large scale credit card fraud and identity theft.  Rather than abiding by the terms of his cooperation agreement and complying with the law, Johnson embarked on his own, extensive fraud scheme in which he obtained the names and social security numbers of hundreds of people and then filed fraudulent income tax returns with the Internal Revenue Service.  Each return was designed to produce a tax refund of approximately $1,300.   During a part of this scheme, Johnson was a fugitive.  Federal agents tracked him first to Nevada and ultimately to Orlando, FL, where he was arrested in September 2006.  Upon arrest, he was found to have nearly $150,000 cash in his possession. 

Daughter Sentenced for Conspiring with Father in Refund Fraud Scheme

On May 24, 2007, in Albany, GA, Shanika Natasha Jones was sentenced to 78 months in prison, three years of supervised release and ordered to pay $972,000 in restitution in addition to a $100 mandatory assessment fee. Shanika Jones and a co-defendant, Marvin Kirk Jones, her father, were charged in a one count superseding indictment with conspiracy to defraud the government with respect to tax refund claims.  They were convicted at trial in January 2007.  The allegations contained within the indictment dealt with Marvin Kirk Jones obtaining names and social security numbers for inmates within the Georgia Department of Corrections, sometimes with their knowledge and consent and sometimes without and filing tax returns claiming refunds in amounts ranging between $6,500 and $9,000.  Approximately 30 false returns were listed in the indictment and the total loss was in excess of $200,000.  The indictment further alleged that Shanika Natasha Jones received and cashed multiple refund checks.  At sentencing, the government proved that Shanika Jones was a part of a conspiracy in which at least 417 false tax returns claimed in excess of $3 million in refunds.  Marvin Kirk Jones, an inmate at the Georgia Department of Corrections was sentenced to 10 years on May 18, 2007.

West Tennessee State Penitentiary Inmate Sentenced to 57 Months for Filing False Claims for Refunds

On May 24, 2007, in Memphis, TN, Frank L. Tate, an inmate of the West Tennessee State Penitentiary, was sentenced to 57 months in prison, two years of supervised release and ordered to pay $19,432 in restitution to the Internal Revenue Service.  Tate was indicted in February 2006 and charged with 21 counts of filing false claims with the IRS.  He pleaded guilty on February 15, 2007, to one count of filing a false claim against the government.  According to the indictment, more than $48,100 in false tax refund claims were filed in the names of Frank Tate and others between February 12, 2001, and February 25, 2002.  The indictment further states that Tate knew that the taxpayers identified in the returns were not entitled to an income tax refund because the information contained in the returns was false and fictitious.

Inmate Sentenced to 10 Years for Role in Fraudulent Refund Scheme

On May 18, 2007, in Albany, GA, Marvin Kirk Jones was sentenced to 120 months in prison, three years of supervised release and ordered to pay $972,000 in restitution and a $100 mandatory assessment fee.  Jones, an inmate at Georgia Department of Corrections, is currently serving a life term for murder.  This sentence of 120 months is to run concurrently with his life sentence.  Jones and a co-defendant were charged in a one count superseding indictment with conspiracy to defraud the government with respect to false claims and were convicted at trial in January 2007.  According to the indictment, Jones obtained names and social security numbers for inmates within the Georgia Department of Corrections, sometimes with their knowledge and consent and sometimes without and filed tax returns indicating that they worked, made substantial withholdings and were entitled to refunds ranging from $6,500 to $9,000.  The indictment further states that Jones' daughter, Shanika Natasha Jones received and cashed multiple refund checks.  At sentencing the government proved that Marvin Jones created and filed at least 417 false tax returns claiming in excess of $3 million in refunds.  Shanika Jones will be sentenced at a date scheduled by the court.

Guilty Plea in First Federal Income Tax Prosecution in Saipan; Fraudulent Tax Refund Scheme Victimized Hundreds of Residents

On May 10, 2007, in Saipan, Antonieta Bonifacio Aguon, a citizen of the Philippines and present in the Commonwealth of the Northern Mariana Islands (CNMI) as an Immediate Relative, pleaded guilty to a one-count Information charging her with conspiring to submit false claims against the United States. This same count further charged Aguon with aiding, assisting, counseling, procuring and advising tax fraud.  According to court documents, beginning around March 2006, Aguon began preparing fraudulent United States income tax returns for CNMI residents in order to claim the Earned Income Tax Credit (EITC).  She conspired with recruiters, who brought her taxpayer information, including names, social security numbers, bank account information, Forms W-2 and fictitious United States addresses. Aguon charged 5% of the tax refund, while the recruiters charged another 5% or more.  Aguon continued preparing and submitting false tax returns until she was approached by special agents of IRS Criminal Investigation in April 2007.  Over a two year period, Aguon prepared approximately 275 false returns, resulting in a loss to the United States of approximately $850,000.

Los Angeles Man Sentenced to 61 Months in Prison for Filing False Income Tax Returns

On May 7, 2007, in Los Angeles, CA, Kenneth Steve John, aka Dennis Steve John and aka Robbin Michael Tucker, was sentenced to 61 months in prison, three years of supervised release, and ordered to pay approximately $449,084 in restitution to the Internal Revenue Service.  According to information contained in the original indictment, beginning in January 2005 and continuing into March 2006, John caused the preparation of federal income tax returns in the names of his aliases and in the names of identity theft victims. The returns reported fictitious withholding amounts and false gambling winnings  purportedly from various horse racing tracks.  Further, both John and his co-conspirators allegedly obtained identification in names other than their own to facilitate cashing the U.S. Treasury checks.  At least one of the names they used in the scheme belongs to an unwitting victim while another name is that of a deceased person.  Additionally, John and his co-conspirators caused monies to be moved through several bank accounts belonging to other individuals.  Some of these individuals received fees for assisting with the scheme by cashing checks and moving funds.  In his plea agreement, John admitted that he and a co-conspirator filed false income tax returns with the Internal Revenue Service, claiming fraudulent refunds of at least $449,084.

Nashville Man Sentenced for Tax Fraud Scheme

On April 23, 2007, in Nashville, TN, Vernon Tresmont Carter was sentenced to 15 months in prison, followed by three years of supervised release and ordered to pay $8,397 in restitution to the Internal Revenue Service.  Carter was indicted on January 18, 2006, charged with three counts of filing false claims for federal income tax refunds with the IRS for the years 2000, 2001 and 2002.  In December 2006, Carter was found guilty by a jury on all three counts in the indictment.  Evidence presented during the trial revealed that Carter provided false W-2 Forms claiming he had earned income from an employer during each of the above years when, in fact, he had never earned the reported wages. These fraudulent income amounts, along with falsely claimed dependants, allowed Carter to claim the earned income tax credit each year, thus generating tax refunds that Carter was otherwise not entitled to receive.  Additionally, trial testimony revealed that when initially questioned by the IRS about the filed tax returns and his fraudulent claims for income tax refunds, Carter denied that he had signed the tax returns and stated that he had not filed tax returns with the IRS for years 2000, 2001, and 2002.  Forensic fingerprint analysis testimony presented during the trial showed that Carter’s thumbprint was found on one of the refund anticipation loan checks Carter received, endorsed and cashed as a result of one of false claims for a tax refund.

State Prisoner Sentenced in Tax Refund Fraud Scheme

On April 17, 2007, in Columbia, SC, John Greg Bradley, an inmate at Evans Correctional Institution in Bennettsville, was sentenced to 24 months in federal prison for income tax fraud.  His federal sentence will begin in 2009, after he completes his current state sentence for armed robbery.  Bradley pleaded guilty in October 2006 for his role in a 2002 conspiracy to obtain tax refunds by submitting false returns in the names of 23 other inmates without their knowledge.  Bradley and another inmate, Gary Wayne Garland, prepared the fraudulent returns and received refunds totaling $56,120.  The refunds were direct deposited into bank accounts set up by Bradley.  Garland was sentenced earlier this year to serve 24 months in prison for his role in the conspiracy.

Fugitive and Repeat Offender Sentenced for Filing False Claims for Refunds

On April 10, 2007, in Eugene, OR, Sandra Roxanne Wright was sentenced to 15 months in prison following her guilty plea to filing false claims for tax refunds and failing to surrender for service of sentence.  As a condition of her supervised release, Wright is required to file correct tax returns and pay $14,067 in restitution to the Internal Revenue Service.  Wright's sentence is to run consecutively with a sentence she received in 2005 for a similar scheme.  In the 2005 case, Wright admitted to filing 124 false tax returns which resulted in $160,052 in fraudulent refunds.  She was sentenced for that scheme to 12 months and one day in prison and was required to voluntarily surrender to federal authorities by October 1, 2005.  Wright failed to surrender and resumed her fraudulent activities.  During her three months as a fugitive from justice, Wright filed at least seven fraudulent tax returns claiming refunds totaling $14,067.   Wright was arrested in Springfield, OR, on January 13, 2006, at the home of an accomplice and she has been in custody since that date.

Shreveport Woman Sentenced for Filing False Claims

On March 23, 2007, in Shreveport, LA, Marlo Marie Turner was sentenced to 30 months in prison and three years of supervised release.  According to the September 2006 indictment, Turner was charged with 16 counts of filing false claims against the Internal Revenue Service.  Turner filed 16 returns claiming approximately $72,456 in refunds that she knew to be false, fictitious or fraudulent in the names of individuals, when in fact they were not entitled to the claim.  On December 15, 2006, Turner pleaded guilty to one count of filing false claims.  In addition to prison time, she was ordered to pay a $2,000 fine and a $100 assessment.

Ohio Women Sentenced in Large Identity Theft Fraud Scheme

On March 21, 2007, in Cleveland, OH, Kathy Davie was sentenced to 63 months in prison for filing false income tax returns.  Davie’s co-defendant, Rhonda Turpin was sentenced in January 2007 to 188 months in prison and ordered to pay $300,000 in restitution as the “mastermind” of a sophisticated identity theft fraud scheme.  The defendant’s conspiracy involved the theft of personal identifier information from numerous victims, illegally obtaining credit reports and getting and/or producing counterfeit Ohio driver’s licenses using the victims’ names and personal information.  The identification information and driver’s licenses were then used to get unsecured loans, apply for credit cards, open bank accounts and negotiate stolen, counterfeit and forged checks.  As a result of the identity theft conspiracy, the defendants caused more than $225,000 in losses.  The evidence presented at trial established that between March 2001 and February 2003, Rhonda Turpin and Kathy Davie electronically filed 23 false and fraudulent federal income tax returns using the names and Social Security account numbers of various individuals which Turpin and Davie knew were false and fraudulent, and knew the individuals were not entitled to the claimed refunds totaling approximately $113,796.  Of this amount, Turpin and Davie actually obtained fraudulent refunds totaling more than $73,000.00 from the IRS.

Defendant Sentenced to Over Five Years in Prison for Filing False Claims with the IRS

On March 5, 2007, in Santa Ana, CA, David James Richardson was sentenced to 63 months in prison, followed by five years of supervised release, and ordered to pay $286,345 in restitution to the Internal Revenue Service.  In November 2006, Richardson was convicted by a jury on five counts of filing false claims, one count of passing a fictitious instrument (check), and one count of obstructing the due administration of the Internal Revenue Service.  According to the indictment, filed April 2006, Richardson made fraudulent claims to the IRS totaling $852,278 for tax refunds that he was not entitled to receive.  Richardson allegedly filed several personal tax returns for the years 2000-2003, including two separate returns for the year 2001 in which he knowingly reported false amounts of federal tax withholding.  Specifically, Richardson presented tax return preparers with W-2 forms reporting income he claimed to have earned from the California non-profit organizations CCK Sports Foundation, Inc. and Everyone Can Play, Inc.  Richardson incorporated CCK Sports Foundation, Inc. on February 18, 2000, and was initially the sole corporate officer.  He claimed the corporation had been organized to promote youth sports.  Richardson also incorporated Everyone Can Play, Inc. on January 11, 2001.

Illinois Man Sentenced to Prison for his Role in Refund Scheme

On February 28, 2007, in Chicago, IL, Lonnie Evans was sentenced to 24 months in prison and ordered to pay $133,006 in restitution for filing false claims for tax refunds.  Evans recruited people to file tax returns using false Forms W-2 and misstated their itemized deductions to inflate their tax refunds.  The refunds were electronically deposited in Evans’ bank account and he shared part of the refund with the taxpayers.

Illegal Alien Sentenced in Tax Fraud Scheme

On February 26, 2007, in Phoenix, AZ, Salvador Ramos Maciel, a Mexican national who was illegally present in the United States, was sentenced to 24 months in prison to be followed by three years of supervised release and ordered to pay restitution of $63,296.  Maciel pleaded guilty in August 2006 to a charge of conspiracy to defraud the United States with respect to refund claims.  Maciel was indicted in May 2005 alleging that he, along with Anna C. Andrade and Jose Jesus Maciel Barajas, submitted by mail 327 Individual Federal Income Tax Returns using 95 different names for the years 1997 through 2001.  The indictment alleged that all the tax returns contained false and fictitious information.  The tax returns used IRS Form W-2s to claim false amounts of wages and income tax withholding, thereby making the alleged taxpayer eligible for a tax refund.  The W-2s were created for non-existent employers or for persons who never were in the employment of the listed employer.  It was alleged that in the course of the scheme those fraudulent returns made false claims for $384,498 in refunds.

Defendant Prepared Returns Claiming Over $200,000 in False Refunds

On February 21, 2007, in Ocala, FL, Leroy Kirkland was sentenced to 36 months in prison followed by three years of supervised release and ordered to pay $79,278 in restitution to the IRS.  In October 2006, Kirkland pleaded guilty to one count of filing false claims against the United States.  In accordance with his plea agreement, Kirkland will cooperate with the IRS and pay all taxes due and owing as well as any interest and penalties.  Facts outlined in the plea agreement indicate that Kirkland prepared and filed 24 tax returns showing false withholding credits and false refunds totaling $227,940. 

Texas Woman Sentenced to Prison for Filing False Tax Returns

On February 22, 2007, in Houston, TX, Deanna Ellen Dick was sentenced to 30 months in prison, followed by 36 months of supervised release and ordered to pay $245,100 in restitution to the United States for aiding and abetting the filing of a false income tax return.  According to the indictment, Dick prepared and filed 28 false federal tax returns.  Some of the tax returns were filed in the names of deceased people and others in the names of living people, including minors.  A total of $115,625 in refunds generated by the false electronically-filed tax returns were deposited into her financial accounts, according to the indictment.  At sentencing, the court held Dick responsible for preparing and filing of a total of 75 false tax returns. 

Three Defendants Sentenced for Filing False Tax Claims

On February 8, 2007, in Albany, GA, the United States Attorney for the Middle District of Georgia announced the sentencing of three defendants on charges of conspiracy to file false claims for refunds with the Internal Revenue Service.  Antonio J. Green, who pleaded guilty on September 5, 2006, was sentenced on November 29, 2006, to 36 months in prison followed by three years of supervised release.  Kenneth J. Thomas, Jr., who entered a plea of guilty on October 2, 2006, was sentenced on December 28, 2006, to 36 months in prison followed by three years of supervised release.  Tanisha N. Nichols, who pleaded guilty on September 19, 2006, was sentenced on December 14, 2006, to five months in prison followed by three years of supervised release.  Additionally, the defendants were ordered by the court to pay restitution totalling $107,163 to the Internal Revenue Service, Bank One and Household Bank.  The indictment alleged that from about January 12, 2002, until about March 19, 2002, the defendants were promoters and recruiters of a scheme to obtain tax refunds from the IRS through the filing of false tax returns and related forms.  The defendants recruited individual taxpayers to file false tax returns and related forms.  The taxpayers were persuaded to provide the defendants their names, social security numbers, dependent information and W-2 forms with the promise of obtaining a larger tax refund.  The defendants used the information provided by the individual taxpayers to create new W-2 forms that were either completely fictitious or which were falsified by increasing the income or tax withholding figures.  For the purpose of obtaining the refunds more quickly, the individual taxpayers usually obtained refund anticipation loans through their tax preparer.  After the individual taxpayers obtained refunds from the IRS or refund anticipation loan proceeds, they would be required to pay a percentage of their refund to one of the defendants.

Defendant Sentenced In Tax Fraud Scheme

On January 30, 2007, Baltimore, MD, Clarenth Miles was sentenced to 15 months in prison followed by three years of supervised release for conspiring to defraud the IRS.  Miles was also ordered to pay restitution to the IRS in the amount of $102,054 and to pay over $35,000 in restitution to two banks that issued refund anticipation loans based on fraudulent tax returns.  According to the plea agreement, from March 2000 through May 2002, Miles, her husband Antonio Miles and her friend, Cantrice Moore, prepared and filed federal income tax returns seeking refunds that included fabricated wages, tax withholding amounts and deductions.  Some included false schedule C business income, dependents and earned income credits.  At least one reported false alimony payments.  The defendants filed false returns in their own and other persons’ names.  The investigation revealed that the defendants filed false federal individual income tax returns seeking refunds totaling more than $200,000.  Miles was employed by the State of Maryland, Department of Social Services, Family Services section, in Baltimore City and had access to the files of foster children.  She stole the identification of several foster children, provided the identity information to Cantrice Moore, and both Miles and Moore filed false tax returns in the names of the foster children or falsely listed the foster children as dependents.  Antonio Miles pled guilty to the conspiracy and identity theft charges, and was sentenced on January 16, 2007, to one year and one day in prison followed by three years of supervised release.  He was also ordered to pay more than $60,000 in restitution to the IRS and the two victim banks. Cantrice Moore pled guilty to the same charges and was sentenced on August 31 to three years of probation, with the first six months to be spent in home detention with electronic monitoring.  Judge Nickerson also ordered her to do 200 hours of community service, recommending that she perform that service at a homeless shelter. The fine was waived, however, Moore was ordered to pay $52,567 in restitution.

Defendant Sentenced to 87 Months for Preparation of False and Fraudulent Tax Returns

On January 26, 2007, in Albany, GA, James E. Thornton was sentenced to 87 months in prison, followed by three years of supervised release, and ordered to pay $77,969 in restitution to the Internal Revenue Service and $23,574 to Bank One.  In October 2006, Thornton was convicted by a jury on 13 counts of assisting in the preparation of false and fraudulent tax returns and one count of conspiracy to defraud the United States.  Evidence presented at trial revealed that in early 1999 and early 2000, Thornton provided individuals with false and fraudulent W-2 Forms directly or through a co-conspirator.  The forms were subsequently used to prepare false tax returns at local commercial tax preparers.  These fraudulent tax returns made claims for refunds to which the individuals were not entitled to receive.  The refund amounts typically ranged from $3,000 to $5,400.

Wisconsin Prison Inmate Sentenced for Filing False Tax Returns

On January 25, 2007, in Milwaukee, WI, Brian R. Tubbs was sentenced to 30 months in prison and ordered to pay restitution of $66,000 for filing false tax returns.  Authorities received a tip in 2004 that Tubbs was preparing fraudulent tax returns to get tax refunds for fellow inmates.  He is currently serving a 20-year bank robbery sentence in the Wisconsin State Prison system.  For preparing the false tax returns for inmates, Tubbs was supposed to receive $2,000.  The tax refunds he filed for other inmates ranged from $6,000 to $7,000.

Inmate Sentenced in Tax Fraud Conspiracy

On January 25, 2007, in Columbia, SC, Gary Wayne Garland, an inmate at the Kershaw Correctional Institution, was sentenced to 24 months in federal court and ordered to make restitution to the Internal Revenue Service for conspiracy to commit tax fraud.  Garland admitted filing tax returns using false identification information, claiming that refunds were due.  Garland is currently serving a 19-year sentence for burglary.  He will serve the 24 month sentence when his current sentence ends.

Woman Gets Prison Term in Tax-Fraud Scheme

On January 22, 2007, in Toledo, OH, Shawntelle Morris was sentenced to 12 months and one day in prison, followed by three years of supervised release for her role in a questionable tax refund scheme. Morris plead guilty to charges of aiding and assisting in the preparation and filing of false income tax returns and conspiracy to defraud the IRS by making false claims. The total amount of false claims in this case was in excess of $172,000. 

Defendants Sentenced to Prison in Connection with Fraudulent Tax Refund Scheme

On January 19, 2007, in Fresno, CA, Michael Guevara Gonzales and Anita Emmalinda Martinez were sentenced for their roles in a fraudulent tax refund scheme.  Gonzales was sentenced to 21 months in prison and ordered to pay $100,675 in restitution and Martinez was sentenced to 10 months in prison and ordered to pay $73,000 in restitution. In October 2006, Gonzales pleaded guilty to 31 counts of making or presenting false claims to the IRS. Martinez pleaded guilty to 16 counts of filing false claims and three counts of assisting in the preparation of false tax returns. In their plea agreements, Gonzales and Martinez admitted that they each submitted false Forms 1040, Individual Income Tax Returns, to the IRS in order to receive refund checks. They further admitted that many of the tax returns used false Forms W-2 to claim fraudulent wages and withholdings, thereby making the alleged taxpayer eligible for a tax refund. The false Forms W-2 also listed employers who did not employ the taxpayers listed on the tax returns. Gonzales and Martinez admitted to using residence addresses of family members and friends to receive the fraudulent refund checks, and to depositing the checks into bank accounts which were owned or controlled by them. Martinez admitted that she aided and assisted in the preparation and presentation to the IRS of income tax returns which falsely claimed that the taxpayers were entitled to the Earned Income Tax Credit.

Man Sentenced in Income Tax Refund Fraud Scheme

On January 18, 2007, in Columbus, OH, Tommie Lee Brown was sentenced to serve 46 months in prison for his role in a conspiracy to defraud the IRS with respect to filing fraudulent claims for refunds. The scheme began in the summer of 2001 while Brown was incarcerated; he assisted other inmates in the preparation of false income tax returns. Brown was released from prison in early 2002 at which time he recruited others to assist in the scheme. The recruits were instructed to take fabricated Forms W-2 to H&R Block to have their income tax returns prepared and filed. When their refunds were issued, the individuals were instructed to ask for Refund Anticipation Loans. When each check was picked up, it was immediately cashed and divided amongst those involved, with Brown taking the majority of the cash. This scheme involved approximately 74 false income tax returns, falsely claiming approximately $446,011 in fraudulent refunds. 

Three Sentenced to Prison for Submitting False Claims for Student Financial Aid

Co-Conspirators Are Sentenced In Connection With Massive Tax Fraud Conspiracy to Seek Tax Refunds

On December 20, 2006, in Washington, D.C., Joseph Queen was sentenced to 12 months and one day in prison, followed by three years of supervised release and ordered to pay $47,402 in restitution.  Also sentenced was Eleanor Pope who received 16 months probation, 180 days of electronic monitoring with home detention, and ordered to pay $79,018 in restitution.  Both Queen and Pope had previously pleaded guilty to charges of conspiracy to defraud the government with respect to false claims and first degree theft.  The mastermind behind the massive tax fraud conspiracy, Keith Campbell, was sentenced earlier to 36 months in prison.  According to the government’s evidence, Campbell and other individuals engaged in a conspiracy between February 2000 and early April 2001 to file fraudulent federal, District of Columbia, and Maryland income tax returns generating fraudulent refunds, which were split among the participants.  A motive for the crimes was to obtain money to purchase heroin.  Campbell and his co-conspirators and others acted to file false income tax returns in their own names and also allowed Campbell to use their home addresses or addresses over which they had access to the mail to have fraudulent refund checks mailed in the names of other individuals.  

Houston Area Radiologist Sentenced to Federal Prison on Tax Charges

On December 15, 2007, in Austin, TX, Charles Thomas Clayton, MD, was sentenced to five years and ordered to pay a $50,000 fine for filing false tax returns.  Clayton was convicted on August 29, 2006 on eight tax charges which included filing false amended tax returns for two years, when he claimed more than $160,000 in refunds. Clayton also failed to file timely income tax returns from 1999-2004, despite receiving more than $1.3 million in gross income during those years. Clayton’s defense centered on the so-called “861 argument” – a claim that domestically-earned income is not taxable. Evidence at trial revealed that Clayton disregarded multiple written notices from the Internal Revenue Service informing him that his 861 argument was without merit. He had also been told the same thing by two Certified Public Accountants.

Defendant Sentenced for Preparation of Fraudulent Tax Returns

On November 30, 2006, in Atlanta, GA, Alease Marie Lewis was sentenced to 18 months in prison, one year of supervised release, and fined $1,000.  Lewis was convicted on September 12, 2006, on charges of assisting in the filing of fraudulent tax returns. According to information presented in court, for the tax years 2001 through 2004, Lewis prepared and electronically filed tax returns with inflated or fabricated deductions.  The deductions resulted in significant refunds for Lewis' customers, which allowed her to expand her tax-preparation business dramatically, from approximately 180 returns in 2002 to 750 returns in 2004.  The false deductions were mainly for business expenses and charitable contributions.  Lewis also prepared returns that claimed dependents for taxpayers who lived alone and mortgage interest for taxpayers who did not own homes.

“The Tax Man” Sentenced; Purchased Drugs with Fraudulent Refunds

On December 11, 2006, in Washington, DC, Keith Campbell (aka George Dyson or “The Tax Man”) was sentenced to 36 months in prison, three years of supervised release, and ordered to pay restitution in the amount of $278,315, for his part in a massive tax fraud conspiracy to fraudulently seek tax refunds. Campbell, who pleaded guilty in August 2006, masterminded a scheme to recruit individuals to file false federal, District of Columbia, and State of Maryland income tax returns in order to get income tax refunds to which they were not entitled. According to the government’s evidence, Campbell and others engaged in a conspiracy between February 2000 and early April 2001 to file fraudulent income tax returns generating fraudulent refunds, which were split among the participants. The fraudulent returns contained false Forms W-2, Wage and Tax Statements, which either reflected employers for whom the listed taxpayer never worked or falsely overstated wages earned and taxes supposedly withheld by a true employer. A motive for the crimes was to obtain money to purchase heroin.

Texas Woman Sentenced to 15 Months for Tax Fraud

On December 6, 2006, in Lufkin, TX, Debra Godwin was sentenced to 15 months in prison, followed by 36 months of supervised release and ordered to pay $91,568 in restitution. She pleaded guilty to tax evasion in August 2006. Godwin gave her tax preparer a forged letter from a Shreveport, LA casino claiming that she had nearly $45,000 in federal income tax withholdings. As a result of the false information, she fraudulently received a $15,013 income tax refund. 

Georgia Defendant Filed False Claims for Refunds

On November 28, 2006, in Atlanta, GA, Lisa Melinda Lyle was sentenced to 30 months in prison and ordered to pay $74,419 in restitution to the IRS and a $1,000 fine. In September 2006, Lyle pleaded guilty to six counts of making false claims against the United States by filing false tax returns and four counts of knowingly using other persons’ names and social security numbers to make false claims. According to court documents, for tax years 1999 through 2001, Lyle electronically filed federal tax returns online claiming refunds were owed. She filed returns in her own name and in the names of family members and acquaintances. The tax returns contained false information relating to the employment and earnings of the taxpayers and were supported by fraudulent W-2 forms. 

Tax Preparer Stole Identification Information of Inmates to File False Tax Returns

On November 22, 2006, in Jacksonville, FL, Morris Hines, aka Jonathon William Morris II, was sentenced to 63 months in prison to be followed by three years of supervised release for making false claims against the Internal Revenue Service (IRS) and for identity theft. Hines was also ordered to pay a personal money judgment of $152,171, and to pay $152,171 in restitution to the IRS. According to court documents, from April 2003 through April 2004, Hines worked as a tax return preparer for Jackson Hewitt, and later for his own business, Compro-Tax, in Lake City, FL. During this time, the defendant prepared and submitted to the IRS more than 80 fraudulent federal income tax returns for the tax years 2000, 2001, 2002, and 2003, seeking bogus refunds totaling more than $400,000. To carry out this scheme, Hines used the internet to obtain personal information, including names and dates of birth, for at least 150 Florida inmates from the Florida Department of Corrections' online database. He then used the internet to search other online public records to obtain the inmates’ social security numbers. Using this information, Hines prepared and filed false tax returns under the inmates’ names and social security numbers without the knowledge or permission of the inmates. Using his knowledge as a tax preparer, Hines was able to prepare tax returns falsely claiming exemptions for dependents, the Earned Income Tax Credit and the Fuel Tax Credit. In addition, Hines prepared false Form 1099's from fictitious companies to support business income reported on Schedule C’s filed with the false tax returns. When Hines received refund checks, he endorsed the checks in the inmates' names and deposited them into bank accounts he controlled under the names Compro-Tax and Jonathon W. Morris. In addition to the bogus refund scheme described above, Hines prepared and filed falsified tax returns on behalf of legitimate clients of Compro-Tax. Without the client’s knowledge, Hines falsely indicated on their returns that the taxpayers were blind, thereby improperly increasing their otherwise legitimate tax refunds.

Chicago Tax Preparer Handed 18 Month Prison Term for Filing False Tax Returns

On November 16, 2006 in Chicago, IL, tax return preparer Donnella Anderson was sentenced to 18 months in prison, followed by 36 months supervised release and ordered to pay $114,375 in restitution for filing false claims with the Internal Revenue Service. Anderson pleaded guilty in August 2006, admitting to falsely inflating tax refunds by increasing wages, fraudulent credits and deductions. In one instance, Anderson filled out a tax return for a client falsely claiming a $7,219 refund. According to court documents, her client was a hairdresser, but on a false W-2 that Anderson created, she listed her client’s 2002 wages as $38,823 from the City of Chicago. Her client never worked for the city. In addition, Anderson falsely listed on that client’s tax return that she gave charitable gifts totaling $3,832.

Defendant Who Used False Identities is Sentenced to 51 Months in Refund Fraud Scheme

On November 6, 2006, in Ft. Smith, AR, Matthew Buescher was sentenced to 51 months in prison to be followed by three years of supervised release and ordered to pay a $200 assessment, $10,000 fine and $122,037 in restitution. Buescher pleaded guilty on May 24, 2006, to one count of mail fraud and one count of filing false claims against the United States. According to an indictment filed in March 2006, between March 2004 and July 2005, Buescher obtained false identities through the internet and then filed federal and state tax returns utilizing these false identities. The indictment charges that Buescher then directed refund checks to be mailed to various addresses, many of them vacant residences at the time. Buescher then attempted to open numerous bank accounts and on-line e-trade accounts in anticipation of negotiating some of the refund checks. During the plea hearing, Buescher admitted to filing a 2004 federal tax return with the Internal Revenue Service on May 2, 2005, in the name of Dale Stewart, using falsified W-2 forms in order to obtain a refund check. Buescher also admitted to filing a fraudulent tax return in the name of Travis R. Davis claiming a refund of $6,723 with the state of Iowa.

Tax Scam Nets Inmate Additional Jail Time

On October 21, 2006, in Cleveland, OH, Michael Murdock was sentenced to 22 months in prison for his role in a prison refund scheme.  Between 2001 and 2003, Murdock used the Social Security numbers of fellow inmates at the Mansfield Correctional Facility to prepare nearly 100 fraudulent income tax returns in an attempt to secure approximately $104,000 in fraudulent income tax refunds.  Murdock mailed the returns to Holly Hatch, who filed the fraudulent returns.  Hatch is currently awaiting sentencing for her part in the scheme.  Murdock is currently serving a life sentence on murder charges.  The 22 month sentence is to be served consecutively to the murder sentence.

Prison Inmate and Co-Conspirators Sentenced for Fraudulent Income Tax Refund Scheme

On October 16, 2006, in Tampa, FL, Kerry Hill, a state of Florida prison inmate, and Laureen Sue Hill were sentenced for their leadership roles in a scheme to file false claims for income tax refunds.  Kerry Hill was sentenced to seven years in prison to be followed by three years of supervised release and ordered to pay restitution of $154,632 to the IRS.  Kerry Hill’s federal sentence will begin after he completes the state sentence he is currently serving.  Laureen Sue Hill was sentenced to eight years and four months in prison to be followed by three years of supervised release and ordered to $154,632 in restitution.  On October 2, 2006, two co-conspirators were sentenced for their roles in the same scheme. Erika Hill was sentenced to 21 months in prison to be followed by three years of supervised release and pay $154,632 in restitution.  Ben Ray Yoder, now an inmate in an Alabama state prison, was sentenced to 30 months in prison to be followed by three years of supervised release and pay $154,632 in restitution.  According to court documents, while serving a sentence in the Jackson Correctional Institute, Kerry Hill recruited fellow inmates to give him their social security numbers and other information needed to complete IRS 1040EZ forms in the names of the inmates for tax years during which the inmates were incarcerated.  Kerry Hill provided that information to his then-wife, Laureen Sue Hill.  Using the inmate information, 1040EZ forms were completed, and each falsely represented that the inmate had been employed, paid income tax, and was eligible for a refund.  Laureen Sue Hill, Erika Hill, and Ben Ray Yoder negotiated the refund checks at institutions in the Sarasota, FL area. The total amount of income tax refunds requested exceeded $650,000. 

Tax Accountant Sentenced to 33 Months for Cheating IRS, Misleading Small Business Clients

On October 12, 2006, in Detroit, MI, Brian Cox, owner of CFO Solutions, Inc., was sentenced to 33 months in prison followed by three years of supervised release.  Cox was also ordered to pay $103,633 in restitution and not to prepare or file tax returns for anyone but himself while under court supervision. On April 25, 2006, Cox entered a guilty plea to 42 counts of filing false claims and eleven counts of preparing false tax documents.  According to court records, Cox, an accountant and tax preparer, targeted small business owners who were involved in tax disputes with the IRS.  Cox approached the owners and officers of these companies who had tax liens or were participating in a repayment plan with the IRS and offered the ability to reduce or eliminate their company tax obligations and get a tax refund.  Cox told the small business owners that he could "re-classify" the wages and income paid to them as the repayment of loans, thereby eliminating the companies' tax obligations to the IRS.  Cox assured the owners and officers that his plan was legal and usually charged between $2,000 and $7,000 for his services.  According to court records, Cox devised a scheme to defraud the IRS by preparing and filing false and fictitious tax documents which indicated that previously filed tax records were incorrect and that tax refunds were due when in fact no refund was due.  In some cases, Cox had the owners sign blank tax forms and later added false figures and statements revising the company's true and correct financial condition.  Some of the false information included reclassifying wages and income as the repayment of owner/officer loans and statements that prior reported funds were made in error.  From November 2000 through April 2001, Cox filed false claims for tax refunds totaling over $195,000 for various small business owners.

Illinois Woman Sentenced for Filing False Tax Returns and Impeding the IRS

On October 3, 2006, in Chicago, IL, Kristine Gelis was sentenced to 24 months in prison, four years of supervised release and ordered to pay $188,900 restitution to the IRS.  Gelis admitted in June 2006 to filing false claims against the US and to impeding the IRS.  In 2000, she filed a tax return claiming a refund of $22,351.  She falsely claimed that she paid $22,351 in tax withholdings and that she earned no taxable income.  In addition, she inflated the number of dependents, deductions and expenses on her tax return.  Gelis also claimed a $164,556 refund by filing an amended tax return for tax year 1999.  When the IRS sought documentation, Gelis created false bank and investment statements, payroll statements and false tax returns.

Oklahoma Tax Preparer Sentenced for Filing False Tax Returns

On October 3, 2006, in Tulsa, OK, Richard Maynor Blackstock was sentenced to 48 months in prison for aiding and assisting in the preparation of fraudulent tax returns. Blackstock was convicted in June 2006 on 32 counts of using a “claim of right” scheme in which people claim deductions that equal or exceed their gross income. Blackstock advised his clients that compensation for labor was not taxable and they could demand refunds for taxes they paid in the past.  If the scheme had been successful, the IRS would have paid more than $450,000 in tax refunds.

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