Some of our favorite recent tax fraud cases.
Cordele, Ga.: Preparer Irene Tamika Smith has received 33 months in prison for conspiring to file false returns to secure inflated refunds for clients.
According to court documents, Smith worked at the tax prep business Quick Tax from 2006 through 2009 when she conspired with co-workers Greene Wylie Sheppard, Sabrina Johnson-Lavant and Chandra Henderson to obtain higher refunds on clients’ returns by falsely inflating clients’ wages to exploit certain tax credits. Smith and her co-conspirators also purchased other people’s IDs, which they then offered to sell to clients so the latter could obtain higher refunds by falsely claiming additional dependents on their returns.
Over the course of four years, Quick Tax claimed more than $500,000 in fraudulent refunds.
Smith’s co-conspirators each pleaded guilty to participating in the conspiracy and were sentenced in 2013: Sheppard to 56 months in prison, Henderson to 18 months and Johnson-Lavant to eight months.
Smith was also ordered to pay $566,171 restitution to the IRS.
St. Louis: Preparer Jennifer Walter has been indicted on multiple tax fraud charges including filing false returns, creating false W-2s and the use of stolen personal information to file for a refund.
According to the indictment, in January 2010 Walter filed a false return for 2009, and between 2010 and 2011 created fraudulent W-2s for individuals to use for preparation by another local preparer. The indictment states that for the tax years 2010 and 2011, Walter provided false W-2s that aided in the filing of some 13 false returns claiming approximately $84,727 in refunds.
Beginning in 2013 while employed by Liberty For All Tax Service, the indictment alleges, she prepared returns for clients by including fraudulent items and tax credits such as wage information that allowed her to falsely claim the EITC and child tax credits for clients. For tax year 2012, Walter filed or helped file some 18 false returns claiming approximately $129,447 in refunds. The indictment adds that in February 2013 she filed a return using someone else’s personal information and pocketed the $6,134 refund.
Walter was indicted on five felony counts of filing false tax returns, one felony count of theft of government funds and one felony count of aggravated ID theft. Each count of filing false tax returns carries a maximum of five years in prison; theft of government funds carries a maximum 10 years in prison and aggravated ID theft a maximum two years in prison. All counts also carry a possible fine of up to $250,000.
Cincinnati: Resident Charles Robinson, 43, has been sentenced to 12 months and a day in prison and three years of supervised release and ordered to pay $135,137 in restitution to the IRS for conspiring to file false claims for federal income tax refunds.
According to court documents, between January 2008 and September 2010 Robinson conspired with local resident Bertha Walker to secure phony federal refunds for the 2007, 2008 and 2009 tax years. Returns were prepared and filed through various online tax prep sites using computers at the Cincinnati Public Library.
Refund anticipation loan checks, income tax refund checks and prepaid debit cards containing fraudulent refunds were mailed to addresses controlled by Robinson and Walker and deposited in bank accounts controlled by them. Robinson escorted individuals to check-cashing locations throughout Cincinnati to cash the checks, then Robinson and Walker took a large portion in some cases all of the refunds. Robinson deposited 11 refund checks, with forged signatures, into his bank account.The pair made some 73 false claims for refunds, stealing some $135,137 from the IRS.
Robinson pleaded guilty on Feb. 12, 2013. Walker pleaded guilty on January 22.
Stockbridge, Ga.: Preparer Bernardo O. Davis, 28, has been sentenced to 21 years and seven months in prison and ordered to pay $7 million in restitution for his role in a fraud and ID theft scheme, according to published reports.
Reports said that from July 2010 to January 2013 Davis operated Davis Tax Service, where he and two co-conspirators led thousands of victims to believe they could apply for “government stimulus payments” or “free government money” from the federal government by providing their names and Social Security numbers.
Davis had more than 1,600 refund checks sent to his home by listing that address as the victims’ address on the returns he filed in their names, according to reports. He also reportedly received thousands of letters addressed to the victims from the IRS, the Social Security Administration and other government agencies.
After seeing such a number of Treasury checks coming to Davis’ home, a mail carrier seized more than 1,000 of the checks and turned them over to authorities.