Some of our favorite recent cases of tax fraud.
Monroe, La.: Preparer Richard Allan Scott, 38, has been sentenced to 57 months in prison and one year of supervised release and been ordered to pay $338,380 restitution for filing false returns.
Evidence revealed that more than 50 false returns for years 2011 and 2012 were prepared; many of the returns contained fictitious information pertaining to W-2 withholdings, dependent care expenses and tax credits.
The amount stolen during the scheme totaled some $338,380.
Cleveland: Two women were sentenced to prison for a conspiracy in which they stole other people’s IDs and collected more than $326,000 in false returns.
Michelle D. Pugh, a.k.a. Michelle Morman, 39, was sentenced to four years in prison. Joi C. Tate, 38, received 32 months in prison. They were ordered to pay $326,265 restitution.
They were previously found guilty of conspiracy to defraud the government, making false, fictitious and fraudulent claims for income tax refunds, theft of public funds, and aggravated ID theft.
Pugh and Tate, acting together and with others, prepared at least 25 false returns for the years 2010 and 2011 for some 20 people including Pugh, which claimed inflated refunds.
Pugh, Tate and others gathered personal ID information to file the returns either by posing as legitimate preparers working through Pugh’s company, MP Tax Services, or through a network of associates. In some cases, the two obtained and used individuals’ IDs without their knowledge or consent; Pugh and Tate also did not list themselves as the actual preparer on any of the returns they filed in others’ names.
On each return, Pugh, Tate and their cohorts generated false refund claims, at least in part by reporting a falsely inflated or fictitious wage income and a resulting false EITC. On some returns, Pugh, Tate and their confederates also claimed false dependents or reported false education and child tax credits.
Pugh and Tate e-filed the returns and generally did not provide a copy of the return to the taxpayer, who did not know the amount of the refund claimed or was told an incorrect amount. In the case of those individuals whose identities were used without their knowledge or permission, Pugh and Tate did not inform them that they received funds from the IRS and instead kept the money. The e-filings included requests that the IRS direct-deposit refunds into bank accounts owned or controlled by Pugh.
Losses from the scheme totaled approximately $326,265.