The former manager of an H&R Block outlet pleaded guilty Monday to charges that he used the identities of his former tax prep clients to file false tax returns seeking fraudulent tax refunds.
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Damon Charles Dubose, 39, of North Hills, Calif., pleaded guilty to one count of wire fraud and one count of filing false claims with the Internal Revenue Service.
While working as a manager for an H&R Block Preparation store in Van Nuys, Dubose used his access to H&R Block records to obtain the personal identifying information of H&R Block clients. He admitted to creating false and unauthorized tax returns for at least 12 individuals using their personal identifying information and submitted the returns to the IRS in order to generate fraudulent tax refunds of at least $48,593. Dubose filed the returns so that the refunds would be accessible by the H&R Block Emerald Card. Dubose then used the H&R Block Emerald Cards at ATMs to withdraw as cash the fraudulent tax refunds.
Dubose was charged in the case last April (see H&R Block Manager Charged in Identity Theft Scheme). Shortly before midnight on Feb. 12, Dubose was seen by a patrolman in La Canada, Calif., loitering near the ATMs of three banks. Dubose was wearing pantyhose over his face along with beanies and a scarf. Inside his vehicle, the officer found six envelopes with a name and partial Social Security number handwritten on the outside, and an H&R Block Emerald Card on the inside.
The Emerald Cards allow H&R Block customers to access their tax refunds electronically like a debit card. Dubose’s vehicle also contained approximately $2,960 in cash and a printout of dates of birth and Social Security numbers that matched the handwritten information on the envelopes. Dubose claimed that the information was for his tax clients and he was authorized to make withdrawals on their behalf.
The Los Angeles County Sheriff’s Department obtained a search warrant for the home of Dubose’s girlfriend and found $6,900 in cash, six H&R block Emerald Cards, and the personal identifying information of more individuals.
H&R Block did not immediately respond to a request for comment.
Three taxpayers whose identifying information Dubose possessed were contacted by law enforcement. All of them said Dubose was not authorized to make withdrawals on their behalf or possess their personal identifying information.
According to his plea agreement, the wire fraud count stems from Dubose electronically transferring an unauthorized tax return from Van Nuys, Calif., to Tennessee or West Virginia. The false claim count stems from an unauthorized tax return filed by Dubose on February 6, 2012 for an individual using fabricated information to falsely claim a refund in the amount of $4,353.
As a result of his guilty plea, Dubose faces up to 25 years in federal prison and a fine of $500,000 when he is sentenced on July 8 by U.S. District Judge Dale S. Fischer.
The investigation of Dubose was conducted by IRS Criminal Investigation’s Los Angeles Field Office, with assistance from the Los Angeles County Sheriff’s Department.