The former manager of an H&R Block outlet has been sentenced to 12 months and one day in federal prison for using the identities of his former tax preparation clients to file false returns with the Internal Revenue Service seeking fraudulent income tax refunds.
Damon Charles Dubose, 40, of North Hills, Calif., was sentenced Monday morning by U.S. District Judge Dale S. Fischer.
Dubose pleaded guilty in March to one count of wire fraud and one count of filing false claims with the Internal Revenue Service (see Former H&R Block Manager Pleads Guilty to Stealing Clients’ Identities). The court sentenced him to 12 months and one day on each count of the conviction, to be served concurrently.
According to documents filed with the court, while working as a manager of an H&R Block Preparation store in Van Nuys, Calif., Dubose used his access to H&R Block records to obtain the personal identifying information, including the names, dates of birth and Social Security numbers, of H&R Block clients. Dubose then used the information to create and submit to the IRS at least 12 false and unauthorized 2011 tax returns, generating 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,” a pre-loaded Master Card. He then used the H&R Block Emerald Cards at automated teller machines to withdraw the fraudulent tax refunds as cash.
H&R Block spokesman Gene King reiterated the statement he gave to Accounting Today after Dubose was arrested. "H&R Block takes this matter very seriously," he said. "This was an isolated incident and we are cooperating fully with authorities on the investigation of a former employee. The situation involves a small number of clients who have been contacted and informed of the steps the company is taking to help them and correct the situation."
On Feb. 16, 2012, Los Angeles County Sheriff’s Department deputies found Dubose standing near ATM machines wearing a beanie, a scarf and panty hose on his face, presumably to disguise his appearance (see H&R Block Manager Arrested for Identity Theft of Tax Clients). The deputies arrested Dubose after they recovered from his vehicle six envelopes with handwritten names and partial Social Security numbers that contained H&R Block information sheets and H&R Block Emerald cards; ATM withdrawal receipts; a printout that contained 12 Social Security numbers and dates of birth corresponding to the names and numbers on the envelope; and $4,078.16 in cash.
The wire fraud count stems from Dubose electronically transferring an unauthorized tax return from Van Nuys to Tennessee or West Virginia. The false claim count comes from an unauthorized tax return filed by Dubose on Feb. 6, 2012 for an individual using fabricated information to falsely claim a refund in the amount of $4,353.
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.