| FOR IMMEDIATE RELEASE | For Information, Contact Public Affairs |
| Thursday, April 15, 2004 | Channing Phillips (202) 514-6933 |
| Local
tax preparer sentenced to 18 months in prison after guilty plea to preparing false income tax returns |
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Washington, D.C. - United States Attorney Roscoe
C. Howard, Jr. and Special Agent in Charge Gregory R. Szczescek, Internal
Revenue Service, Criminal Investigation, announced that Deirdre F.
Roy, 34, of the 1100 block of Owen Place, N.E., Washington, D.C.,
was sentenced today to 18 months of incarceration by U.S. District
Judge Ricardo M. Urbina to be followed by a year of supervised release.
During that year of supervised release, Judge Urbina specifically
ordered Roy to complete 150 hours of community service and to pay
restitution to the Internal Revenue Service for the amounts she owed
as a result of filing her own false income tax returns. On June 24,
2003, Roy pled guilty to preparing hundreds of false income returns,
in violation of 26 U.S.C. Section 7206(2). In pleading guilty, Roy admitted that in 1993, she began preparing income tax returns at Metro Tax Service, which is located at 3938 Minnesota Avenue, S.E., in the District of Columbia. In 1997, the business's ownership changed and was renamed to Adbren Tax Services. Roy continued to work for the new owner, preparing several hundred income tax returns during each tax filing season. At the same time, Roy was employed by the United States Postal Service, in Capitol Heights, Maryland, as a mail handler. Roy, however, took a leave of absence from her employment at the Postal Service in 2000, to spend more time at Adbren preparing 1999 tax year income tax returns. During this filing season, Roy admitted that she assisted in the preparation of approximately 1,000 income tax returns. Many of the returns prepared by Roy were false. Depending upon the individual client's economic status, Roy employed several schemes to reduce the client's tax liability and to get the client a refund to which the client was not entitled. For those clients whose earned income was relatively low, Roy added individuals under the dependency exemption provision even though she knew those clients were not entitled to claim the individuals as dependents. As a result of falsely claiming these dependents, Roy gave her clients tax credits, including earned income, child, and dependent care, to which they were not entitled. These false dependents also had the effect of changing filing status to head of household where those clients should have been filing as single. By changing their filing status, Roy was able to increase their standard deduction in excess of what they were entitled to under the law. For those clients whose income was higher, Roy prepared a Schedule A with false itemized deductions which had the effect of reducing the adjusted gross income for those clients. Quite often, Roy claimed gifts to charity and job-related expenses, including travel, uniform cleaning, union dues, and education training. The clients never provided her with documentation reflecting such charges. In addition to the false Schedule A deduction scheme, Roy prepared returns claiming education expenses. These education credits had the effect of reducing her clients' tax liability dollar for dollar. On two separate occasions in 2000, Roy prepared income tax returns for federal agents acting in an undercover capacity. On each of these occasions, Roy prepared returns based on fraudulent information, including education expenses, charitable contributions, job-related expenses and tax preparation fees that the undercover agents had specifically told her that they had not incurred. When one of the undercover agents questioned her, Roy told the agent that she "gave [her] cash contributions, the minimum you can claim without proving [it]." Roy assured the undercover agent that the government was "not going to come after you for $2,500." Even after Roy was notified in May 2000 that the Internal Revenue Service was conducting a criminal investigation, she continued to prepare false returns at another tax preparation business known as Rocket Fast Tax Refunds, in Capitol Heights, Maryland. Some of her clients at Adbren had her prepare their returns for these years as well. During the 2001 and 2002 filing seasons, Roy prepared an additional 66 false tax returns through the same schemes she had previously employed. Not only did Roy fraudulently prepare tax returns for others at Adbren and Rocket Fast, she admitted that she had filed false income tax returns for herself for the tax years 1997 through 2001 by claiming refunds to which she was not entitled. She claimed unqualified dependents under the exemption provision and relied upon head of household filing status even though she resided with her mother during 1997 and 1998. In addition, she improperly gave herself earned income, child care, and child tax credits. Roy also failed to report wages she earned from Adbren in 1998, 1999, and 2000 for preparing tax returns. She further failed to report additional wages she earned in 1997 from the United States Postal Service. In sum, the total federal tax loss resulting from Roy's criminal conduct during these years was approximately $434,287. In announcing today's sentence, U.S. Attorney Roscoe C. Howard, Jr. and Internal Revenue Service Special Agent in Charge Gregory R. Szczescek commended the investigatory work of IRS Special Agent James Hessler and Revenue Agent Erin Edwards. They also praised Assistant United States Attorney Susan B. Menzer who conducted the investigation and negotiated the plea in the case. |
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