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

Maryland Defendant Sentenced to Over 4 Years in Prison in Scheme to File False Claims Seeking Over $4 Million in Fuel Tax Credit Refunds

On April 21, 2009, in Greenbelt, Md., June Leftwich, formerly of Forestville, Maryland, was sentenced to 55 months in prison, followed by three years of supervised release, and ordered to pay $2,404,087 in restitution. According to court documents, between 2005 and at least July 2008, Leftwich and several co-conspirators filed 154 fraudulent corporate tax returns for tax years 2003 through 2007, asserting that he or corporations purportedly owned by Leftwich or his co-conspirators had paid taxes on fuel that was used for non-taxable purposes, entitling them to obtain refunds. The returns claimed fuel tax credit refunds totaling $4,063,763. In fact, at no time did Leftwich or any corporation owned by him or his co-conspirators purchase the fuel on which the tax refunds were claimed, nor were they entitled to any of the refunds.  Specifically, Leftwich also prepared 13 fraudulent individual and corporate tax returns for tax years 2003 through 2006, filed by his wife, Dorian Holmes, falsely claiming fuel tax credit refunds totaling $830,384.  Holmes was previously sentenced to two months in prison followed by three years of supervised release, and ordered to pay $499,364 in restitution. Co-conspirator Telemaga Bamba was previously sentenced to 70 months in prison and ordered to forfeit two Mercedes-Benz vehicles and a Harley-Davidson motorcycle and to pay $928,649 in restitution.  In a related case, on January 16, 2009, James Hallmon was sentenced to 21 months in prison for filing federal corporate tax returns in which he fraudulently claimed $647,060 in fuel tax credits.

Husband and Wife Sentenced in False Tax Refund Scheme

On April 20, 2009, in Columbia, S.C., Brian O. Bobo and his wife, Latoya R. Bobo, both of Simpsonville, were sentenced for their parts in a conspiracy to file false tax returns with the Internal Revenue Service (IRS).  Brian Bobo was sentenced to 37 months in prison, to be followed by three years supervised release; Latoya Bobo was sentenced to 12 months in prison, to be followed by three years supervised release.  Both were also ordered to make restitution.  According to court documents, in 2003 and 2004, the Bobos headed a seven-defendant conspiracy which prepared and filed false income tax returns using the identifying data of real people.  The names, addresses, and social security numbers were obtained by Latoya Bobo from her place of employment, the Department of Social Services, and by the other conspirators from friends and relatives.  Once the personal identifiers were entered into false returns and filed, the conspirators would have the refunds sent to their own bank accounts. During the two years, 47 false returns claiming approximately $106,000 in refunds were filed.  The remaining co-defendants have all entered guilty pleas and are awaiting sentencing.

Tax Conspiracy Defendants Sentenced To Federal Prison

On April 15, 2009, in Sherman, Texas, Ransom Nyamaharo, of Plano, Texas, was sentenced to 120 months in federal prison for tax fraud.  Nyamaharo was convicted by a jury on January 16, 2009, for conspiracy to present false claims to the government and conspiracy to commit identity theft and bank fraud.  Nyamaharo was also ordered to pay restitution of $3,097,822. Co-defendant, Karimanjira-Dumba Made, of Plano, was also convicted on January 16, 2009, and was sentenced on April 14, 2009, to 60 months in federal prison. According to information presented in court, from 2005 to 2008, Nyamaharo and Made opened and operated retail tax preparation businesses in which they prepared and filed fraudulent tax returns on behalf of clients.  As part of their scheme, they also prepared and filed tax returns in the names of individuals whose personal identifying information had been obtained and used without authorization.  To further facilitate the fraud, Nyamaharo and Made established business relationships with several banks which offered refund anticipation loans.  The false claims for income tax refunds were submitted to the Internal Revenue Service (IRS) and also to the banks.  The banks, relying upon the accuracy of the information provided to them, authorized the issuance of loans secured by the false income tax refund claims.  The IRS and the banks incurred substantial losses as a result of the payments made on the false claims for federal income tax refunds.

California Woman Sentenced for Scheme to File False Income Tax Returns

On April 13, 2009, in Los Angeles, Calif., Tasha Johnson, of Bellflower, California, was sentenced to 16 months in prison for her role in a scheme in which participants filed false federal income tax returns that used names, social security numbers and other personal information that had been stolen from more than 280 patients of Del Amo Hospital.  According to court documents, Johnson and her accomplices filed tax returns that fraudulently sought more than $600,000 in refunds. As a result of the bogus tax returns, the Internal Revenue Service paid out more than $280,000. In addition to her prison sentence, Johnson was ordered to pay restitution to the Internal Revenue Service.

Vermont Man Sentenced for Bank, Wire, and Tax Fraud

On March 26, 2009, in Burlington, Vt., Ahmad Kanan, of Essex Junction, Vermont was sentenced to 37 months imprisonment, to be followed by five years of supervised release, and ordered to pay approximately $213,000 in restitution. According to court records, Kanan used the stolen identity of approximately 37 victims to file fraudulent tax returns with the Internal Revenue Service (IRS) as well as a number of state tax agencies. He prepared the returns with false W-2 statements and structured the returns to provide for refunds. The refunds were then electronically deposited into accounts that Kanan controlled and into the accounts of family members and a family business. Tax refund checks were also sent to various addresses, as directed and controlled by Kanan.  He also opened various credit card accounts as well as bank accounts in the names of third parties whose identities he purloined. He obtained cash advances on the credit cards and deposited that cash into various bank accounts he maintained at local banks as well as various on-line banking institutions. Kanan was also involved in other schemes using stolen identities. He manufactured checks on his home computer using stolen routing numbers and account numbers. He then deposited those checks into the bank accounts he controlled. Using other stolen routing and account numbers, he arranged for electronic withdrawals from a victim’s account to pay his credit card accounts.

Co-Conspirators Plead Guilty and Sentenced for Fraudulently Claiming Millions in Fuel Tax Credit Refunds

On March 12, 2009, in Greenbelt, Md., Telemaga Bamba, formerly of Virginia, was sentenced to 70 months in prison to be followed by three years of supervised release on charges of mail fraud and filing a false claim in connection with a scheme to obtain fraudulent tax refunds from the IRS. In addition, Bamba was ordered to forfeit two Mercedes-Benz vehicles and a Harley-Davidson motorcycle, as well as pay $928,649 in restitution. Soumahoro Ben Amara, of Silver Spring, Maryland, pleaded guilty to the same charges. According to Bamba’s plea agreement, he and his co-conspirators filed 154 fraudulent corporate tax returns for the tax years 2004 through 2007, claiming $11,772,004 in refunds for fuel tax credits. According to Amara’s plea agreement, between 2006 and at least July 2008, Amara filed 43 fraudulent corporate tax returns for tax years 2005 through 2007, asserting that corporations purportedly owned by him had paid taxes on fuel that was used for non-taxable purposes, entitling them to obtain refunds. The returns claimed fuel tax credit refunds totaling $3,321,594. In fact, at no time did Amara or any corporation owned by him purchase the fuel on which the tax refunds were claimed. Court documents state that Telemaga Bamba prepared the tax returns filed by Amara and shared the proceeds of the refund checks. Another co-conspirator, June Leftwich also prepared 13 fraudulent individual and corporate tax returns for tax years 2003 through 2006, filed by his wife, Dorian Holmes, falsely claiming fuel tax credit refunds totaling $830,384. According to his plea agreement, Leftwich filed 60 fraudulent corporate tax returns for the tax years 2003 through 2007, fraudulently claiming $4.2 million in refunds for fuel tax credits. Holmes was sentenced to two months in prison followed by three years of supervised release for her role in the scheme, and ordered to pay $499,364 in restitution. Amara and Leftwich are awaiting sentencing. In a related case, on January 16, 2009, James Hallmon was sentenced to 21 months in prison for filing federal corporate tax returns in which he fraudulently claimed $647,060 in fuel tax credits.

Husband and Wife Sentenced in Tax Preparation Fraud Scheme

On March 12, 2009, in Miami, Fla., Ossmann Desir and his wife, Marie Gella Alcide, were sentenced to 22 months and 14 months, respectively. Both defendants were ordered to serve three years of supervised release and to pay $396,651 in restitution. In April 2008, Desir and Alcide were arrested and charged in a 45 count Indictment with conspiracy to defraud the United States, filing false claims, misusing social security numbers, and aggravated identity theft. The Indictment stated that the defendants obtained the personal identifying information of numerous individuals, including individuals who were deceased, and used this information to prepare and file fraudulent federal income tax returns in those individuals' names. As further stated in the Indictment, the defendants created false 1040 Forms and W-2 Forms. Thereafter, any refunds obtained through the scheme were deposited into bank accounts controlled by one or both of the defendants. According to court documents, Desir obtained much of the personal identifying information through an immigration consulting business he operated in North Miami, Florida. Because of the nature of the work that Desir did for clients, clients were requested to turn over their personal identifying information such as their names, social security numbers, dates of birth, and in some instances, the identifying information of dependants.

New York Inmate Sentenced for Submitting False Claims for Refunds

On March 10, 2009, in Syracuse, New York, Juan Sanchez was sentenced to 57 months in prison, to be followed by three years of supervised release, and ordered to pay $15,532 in restitution to the Internal Revenue Service (IRS). Sanchez, who is a prisoner in the Wende Correctional Facility in Alden NY, pleaded guilty to conspiring to defraud the United States by submitting false claims for tax refunds to the IRS. Sanchez admitted that between 2003 and 2005, while incarcerated by the state of New York, he used the names and social security numbers of other individuals to prepare and to file 21 income tax returns which fraudulently claimed tax refunds. The false tax returns claimed that the purported taxpayers were employed, earned wages, and had withheld from their income more in taxes than they actually owed, thus entitling them to a refund.  In truth, the purported taxpayers did not work for the named employers, did not earn the wages, did not pay the claimed withholding taxes, and were not entitled to the tax refunds as claimed on the tax returns. Sanchez further admitted that he had recruited non-incarcerated visitors and acquaintances to mail the false tax returns he prepared to the IRS using return addresses, accessible to his non-incarcerated co-conspirators, in order to retrieve tax refund checks sent by the IRS.

Woman Sentenced to Prison for Tax Refund Fraud Scheme

On February 13, 2009, in Pittsburgh, Pa., Edna Gorham-Bey, a resident of Alexandria, Virginia, was sentenced to 15 months in prison, followed by three years of supervised release, on her conviction of conspiracy to defraud the government with respect to false claims for refunds. According to information presented to the court, from 2002 and continuing until April 2003, Gorham-Bey, the self-proclaimed "Sultana" of the United States Moorish American Nation, conspired with others to defraud the United States by filing fraudulent federal income tax returns. The information presented at trial showed that Gorham-Bey conspired with George Brooks, an inmate at SCI-Pittsburgh, and others to prepare and file six federal income tax returns in the name of Brooks and five other inmates at SCI-Pittsburgh. Gorham-Bey received the refund checks at the addresses she controlled or was associated with, and then deposited the checks in the bank account of Children's Hospitality House, Inc., a Washington, DC-based organization run by Gorham-Bey. Gorham-Bey, who had sole signatory authority over this bank account, withdrew all monies associated with the refund checks immediately following their deposit.

Two Men from Massachusetts Sentenced in Tax Scheme

On February 12, 2009, in Boston, Mass., Rudy Alberto Rodriguez, of Lynn, Massachusetts, and Luis Pena, of Worcester, Massachusetts, were sentenced for their roles in a widespread scheme to obtain fraudulent income tax returns. Rodriguez was sentenced to 24 months in prison, to be followed by three years of supervised release. Pena was sentenced to time served of over ten months imprisonment, to be followed by three years of supervised release. Both defendants are subject to deportation.  According to court documents, Rodriguez and Pena, citizens of the Dominican Republic, were arrested on a Complaint in March 2008, and later pleaded guilty in December 2008 to charges that they conspired to obtain social security numbers from persons living in Puerto Rico. Rodriguez and Pena used the social security numbers to create fraudulent Forms W-2 that stated false amounts of tax withholdings and used bogus Forms W-2 to prepare and file false federal income tax returns, claiming refunds to which they were not entitled. Rodriguez and Pena then intercepted the mailed refund checks by bribing United States Postal Service mail carriers or by having the refund checks mailed to addresses that were controlled by Rodriguez and Pena.

Connecticut Resident Sentenced for Role in Tax Refund Fraud Scheme

On January 30, 2009, in New Haven, Conn., Igor Rodov, a citizen of Belarus, was sentenced to 12 months in prison, followed by three years of supervised release, and ordered to pay $208,214 in restitution. Following his term of imprisonment, Rodov is subject to deportation to Belarus. According to court documents and statements made in court, from January to November 2006, Rodov aided and abetted another individual to engage in a scheme to defraud the United States Department of Treasury and 120 individual federal income taxpayers of money by means of materially false and fraudulent representation. The other individual was able to obtain the personal information of individual taxpayers, including names, addresses, social security numbers, and wage information. The individual thereafter used that personal information to electronically file federal income tax returns for those taxpayers using two Web sites. Those filings were done without the consent of the taxpayers. The individual electronically signed each of the filings and, in so doing, fraudulently represented that he was the individual taxpayer named in the filings. Rodov knowingly associated and participated in this scheme to defraud by opening several bank accounts in his personal name with several banks in Connecticut. 

Texas Couple Sentenced for Identity Theft and Filing False Tax Returns

On Jan. 22, 2009, in Dallas, Texas, Levander Carlton McLean, and his wife, Rita Murphy McLean, of Garland, Texas, were each sentenced to 60 months in prison and 51 months in prison, respectively, for conspiracy to unlawfully use identification documents, and filing false tax returns. The McLean’s were also ordered to pay $208,600 in restitution. In July 2001, Levander and Rita Murphy McLean convinced their nephew, a Texas Department of Public Safety driver's license technician, to provide a fraudulent Texas driver’s license and a Texas identification card in the names of two innocent people living in North Carolina and South Carolina. The McLeans used these identification documents, as well as a fraudulent Michigan driver's license that Rita McLean obtained in the name of an innocent Texas resident, to open several fraudulent bank accounts in Dallas, Michigan, and North Carolina. From 2002 through 2004, the McLeans deposited more than $200,000 in proceeds from more than 130 false federal income tax returns, which had been filed in the names of real taxpayers using stolen W-2s, into these fraudulent accounts. The couple was convicted at trial in September 2008.

Four Missouri Defendants Sentenced for $15 Million Tax Fraud Conspiracy

On January 15, 2009, in Kansas City, Mo., four defendants were sentenced for their roles in a multi-million dollar conspiracy to defraud the IRS. Their scheme involved stealing the identities of hundreds of victims, primarily nursing home residents, which were used to seek more than $15 million in fraudulent federal tax refunds. Karingithi Gotonga Kamau, a Kenyan citizen living in Kansas City, was sentenced to 21 months in federal prison and ordered to pay $221,955 in restitution. Jeanette Alexander, of Kansas City, Mo., was sentenced to five years of probation and ordered to pay $34,541 in restitution. Moses Ndubai, a Kenyan citizen, was sentenced on January 15, 2009, to 41 months in prison and ordered to pay $264,799 in restitution. Michael Anderson was sentenced to 14 months in prison and ordered to pay $40,837 in restitution. All four defendants pleaded guilty to their roles in the conspiracy to steal identity information (including Social Security numbers), and use it to file more than 540 fraudulent federal tax returns using the names of more than 500 identity theft victims. Conspirators filed up to six state tax returns simultaneously with each federal return, causing a loss to at least 27 states. In total, conspirators claimed over $15 million in tax refunds in the names of identity theft victims, and they actually received at least $2.3 million in fraudulent refunds. Co-defendant Loretta Wavinya, a Kenyan citizen living in Kansas City, Mo., pleaded guilty to organizing and leading the conspiracy and was sentenced to 14 years in federal prison without parole. In addition to the conspiracy, Wavinya pleaded guilty to wire fraud and aggravated identity theft. Her sister, Lillian Nzongi, also pleaded guilty and was sentenced to 70 months in federal prison. Wavinya worked as a tax preparer and as a certified radiology technician for a company that visited patients on-site at multiple nursing homes in the Kansas City area. In the course of her employment, she had access to patient identity information that was later used in the conspiracy. She recruited other employees of health care facilities to steal identity information from patients. Wavinya was the largest single filer and received the largest share of the proceeds, much of which was invested in assets outside the United States. In total, the IRS believes that Wavinya was directly responsible for at least $9.6 million in fraudulent filings. Wavinya sent her proceeds overseas and maintained passports and thousands of dollars in a bank box. Wavinya, who created the scheme, also taught other conspirators how to file fraudulent tax returns.

Indiana Woman Sentenced To 24 Month Imprisonment for Filing 47 False Tax Returns

On January 7, 2009, in Indianapolis, Ind., Lori A. Crisp was sentenced to 24 months imprisonment and was ordered to pay $34,157 in restitution for filing false claims for tax refunds. Crisp, an income tax return preparer and a manager of other tax return preparers, pleaded guilty earlier to preparing and electronically filing 47 false claims in the names of other individuals totaling $218,379. Each of the tax returns included fraudulent Forms W-2 and claimed fictitious withholdings. Of the 47 returns, 46 showed the exact same amount of wages ($32,289) with varying amounts of fictitious withholdings. Of the 47 false returns, 36 also claimed fraudulent education credits. Before she electronically sent most of the tax returns to the IRS, Crisp changed the paid preparer section of each return to reflect another return preparer’s identity in order to conceal her offense. Each of the tax returns requested a refund anticipation loan (RAL). After preparing and filing the returns, Crisp shredded the H&R Block files for these returns, in order to further conceal her offense. Then, when the IRS attempted to obtain the files from H&R Block during the investigation, none of the files were available.

Chicago Man Sentenced on Filing False Tax Refund Claims

On December 22, 2008, in Chicago, Ill., Cordell King was sentenced to 37 months incarceration followed by three years of supervised release.  According to court documents, during 2001 through 2002, King and his co-defendant conspired to defraud the IRS by filing false tax returns that included claims for tax refunds.  King prepared 51 false tax returns, using information and social security numbers of deceased individuals, for the purpose of fraudulently claiming refunds totaling $97,657.  King obtained refund anticipation loans (RALs) for all 51 tax refunds and IRS released the refunds to the bank providing the RALs.  In furtherance of their conspiracy, King's co-defendant recruited individuals to receive the money from the RALs into various bank accounts and would have those individuals pay her a portion of the RAL amounts.  King was further ordered to make restitution of $35,212 to the IRS.

Detroit Man Sentenced for Making False Refund Claims

On November 24, 2008, in Detroit, Mich., Booker T. Gregory, Jr., was sentenced to 18 months in prison, followed by two years of supervised release, and ordered to pay $26,662 in restitution.  Gregory pleaded guilty in August 2008 to conspiracy to defraud the Internal Revenue Service (IRS) and making a false claim for a tax refund.  According to court records, from 1998 through 2001, Gregory defrauded the IRS by aiding taxpayers to receive fraudulent refunds. In order to secure larger income tax refunds, he would take legitimate W-2 forms from the taxpayers and alter the amounts.  If the taxpayer was unemployed, he would take their personal information and create a false Form W-2, using fictitious wages and withholdings.  According to court records, Gregory directed the taxpayers to a legitimate tax preparation service, in some cases, paying an individual to provide transportation for them. The taxpayers provided the false documents to the return preparers.  The false tax return was electronically transmitted to the IRS. At the same time, the taxpayer would apply, through the tax preparation service, for a “refund anticipation loan” (RAL). Usually within days of the electronic filing of the tax returns, a disbursement check from the RAL would be issued and the loan proceeds split between the taxpayer and Gregory. In some cases, Gregory charged $1,500 for his services and provided referral fees to individual who brought other taxpayers into the scheme.  Gregory was identified as having caused the filing of 36 false tax returns, claiming refunds of approximately $187,667.

Two Kenyan Women Sentenced for $15 Million Tax Fraud Conspiracy

On November 13, 2008, in Kansas City, Mo., Loretta Wavinya and her sister, Lillian Nzongi, were sentenced to prison terms of 168 months and 70 months, respectively, for their roles in a multi-million dollar conspiracy to defraud the IRS. The Kenyan nationals lived in the Kansas City area and were involved in a wire fraud scheme that involved stealing the identities of hundreds of victims, primarily nursing home residents, which were used to seek more than $15 million in fraudulent federal tax refunds. Wavinya, a tax preparer and radiology technician who visited patients on-site at multiple nursing homes, pleaded guilty in June 2008 to using stolen identities to file more than 540 fraudulent federal tax returns using the names of more than 500 identity theft victims. The conspirators filed up to six state tax returns simultaneously with each federal return, causing a loss to at least 27 states. In addition to the conspiracy, Wavinya pleaded guilty to wire fraud and aggravated identity theft. Wavinya was the largest single filer and received the largest share of the proceeds, much of which was invested in assets outside the United States. In total, the IRS believes that Wavinya was responsible for at least $9.6 million in fraudulent filings. Wavinya sent her proceeds overseas and maintained passports and thousands of dollars in a bank box. She also taught other conspirators how to file fraudulent tax returns. In order to conceal their true identities, Wavinya and other conspirators electronically filed fraudulent tax returns through public Internet “hot spots,” such as coffee shops or restaurants, and through unsecured private wireless networks maintained by unwitting individuals with no connection to the conspiracy. Law enforcement officers discovered evidence that Wavinya used her neighbor's unsecured wireless network to connect to the Internet. The false tax information was used to generate federal refund claims in the range of $4,000 to $47,000 each. Mail related to the returns and credit cards was sent to commercial mailboxes across Kansas City, and Wavinya and other conspirators often used “runners” to pick up this mail in order to conceal their own identities. Nzongi pleaded guilty on July 23, 2008, admitting to her role as one of those runners. Wavinya and other conspirators opened numerous bank accounts in Kansas City and elsewhere to receiving electronic fund transfers of tax refunds. Shortly after a refund payment was wired into an account, conspirators used runners to help them withdraw the money. The conspirators wrote checks to the runners in amounts less than $10,000 and drove the runners from bank to bank to cash the checks until the accounts were depleted, or the bank, or the IRS detected the fraud and froze the account. The runners provided the withdrawn funds back to Wavinya and others and received a small payment for their services. Some of the money obtained by the conspiracy was wired to banks in Kenya, where refund money was sometimes withdrawn directly from accounts through automated teller machine (ATM) withdrawals occurring in Kenya.

Oklahoma Woman Sentenced for Filing False Tax Returns and Identity Theft

On November 13, 2008, in Tulsa, Okla., Cynthia Michelle Odom was sentenced to 102 months in prison and ordered to pay $44,176 in restitution to financial institutions and $83,806 to the IRS. Odom pleaded guilty on August 15, 2008 to 18 counts of filing false tax returns, one count of aggravated identity theft, and one count of making a false statement to a financial institution. She admitted in her plea agreement that she prepared or caused to be prepared false federal income tax returns using the names and social security numbers of prisoners with whom she was incarcerated in the Oklahoma Department of Corrections. She filed the false tax returns after her release from prison. After submitting the false tax returns to the IRS, she obtained refund anticipation loans by making false statements to financial institutions.

Tax Return Preparer Sentenced for Filing False Returns Using Fraudulent Forms W-2

On October 31, 2008, in Atlanta, Ga., Antonio Millige Adams was sentenced to 51 months in prison to be followed by three years of supervised release, and ordered to pay $117,368 in restitution; specifically, $69,752 to the Internal Revenue Service (IRS) and $47,615 to the victim bank, Santa Barbara Bank & Trust. Adams pleaded guilty on August 6, 2008, to charges of conspiring to defraud the United States by assisting others in filing false claims for income tax refunds with the IRS. According to information presented in court, beginning in January 2002 and continuing through August 2004, Adams conspired with co-defendant Marla Nicole Wells and others to electronically file tax returns for dozens of individuals, claiming refunds to which they were not entitled.  The total losses resulting from the conspiracy exceeded $220,000. A dozen or more fraudulent returns claiming a total of $60,504 in refunds were filed but not paid. Adams and 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, often accompanied by Adams, 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. The filers were often unemployed or had very low income. To ensure that they received their fee plus a portion of the fraudulent return (which could be as much as half the refund), Adams and Wells directed the filers to seek refund anticipation loans and occasionally accompanied the filers to the bank. Wells was convicted of conspiracy charges on June 27, 2007, and sentenced to 30 months in prison on September 26, 2007.

Alaska Man Sentenced for Filing False Claims for Tax Returns

On October 22, 2008, in Anchorage, Ala., Kong Lor was sentenced to 24 months in prison and ordered to pay $79,596 in restitution to the U.S. Treasury for filing false claims for tax returns. Lor pleaded guilty to one count of filing false claims in August 2008. From late 2004 through early 2005, Lor prepared false tax returns for Hmong immigrants who spoke, wrote, and understood little or no English and had little understanding of the U.S. tax system. Many of the taxpayers were elderly and all received Supplemental Security Income (SSI). SSI is a federal income supplement program designed to help aged, blind, and disabled people with little or no income. According to the plea agreement, clients were instructed to obtain benefit statements from the social security office. He then prepared false returns that reported that taxes had been withheld from income received and that a refund of the withholding taxes was due. The taxpayers had not earned taxable income, there had been no withholding, and no refund was due. Copies of the SSI statements were attached to tax returns, even though SSI is not taxable, there is no withholding, and it need not be reported on income tax returns. The occupation of the taxpayers was listed as disabled. Lor prepared returns on his personal computer, often while clients waited. Clients then signed the returns and mailed them to the IRS. The “Paid Preparer” section of the returns falsely indicated that the returns were “self prepared” even though Lor was paid to prepare them and required by law to sign them. Clients agreed to pay Lor a portion of any refund received, often 25 percent.

Montana Prisoner Sentenced for Filing False Tax Returns

On September 26, 2008, in Helena, Montana, Gary Eugene Radi, of Las Vegas, was sentenced to 60 months in prison and ordered to pay $40,920 in restitution for making fraudulent claims for federal income tax refunds. According to the U.S. Attorney, Radi helped fellow prisoners at the Crossroads Correctional Institution prepare their tax returns. He pleaded guilty to falsifying one inmate’s tax return information. At trial, the government would have called numerous former Shelby inmates for whom Radi prepared false tax returns, both in 2004 (for the year 2003) and in 2005 (for the year 2004). Those inmates would have provided evidence concerning Radi’s scheme by describing threats Radi made to encourage payments for his fraudulent tax return filings. Many of the inmates would have also testified that Radi demanded payment for his services from the proceeds of the refunds, often ranging between $200 and $400, as opposed to the purchase of commissary items.

Baltimore Man Sentenced in Scheme to File False Tax Returns on Behalf of State Prisoners

On October 7, 2008, in Baltimore, Md., Giacumo Marzano was sentenced to 25 months in prison followed by three years of supervised release, and ordered to pay $200,000 in restitution. Marzano pleaded guilty in July 2008 on charges of conspiracy to defraud the United States and aggravated identity theft, in connection with a scheme to file false income tax returns on behalf of inmates from the Maryland Department of Corrections and other prisons. According to his plea agreement, Marzano had contact with inmates who were housed in Maryland state prisons. He sent the inmates blank federal tax returns, they mailed back the completed forms containing false information, and Marzano mailed the fraudulent tax returns to the Internal Revenue Service (IRS). He worked with other co-conspirators to mail, receive and deposit tax refunds obtained through the scheme. Many of the refund checks were mailed to a special post office box that Marzano opened using an alias, “DeeCarlo."  In addition to the tax fraud scheme, Marzano used and produced false social security cards, Maryland driver’s licenses and fraudulent credit cards in the name of an individual who is currently residing in a medical facility, without that person’s knowledge. Marzano also used another person’s social security number. He opened bank accounts and credit cards with that social security number. Marzano deposited money from the tax fraud into those fraudulent bank accounts.

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