10 January 2007 Williams, Pruitt, Williams, Patton, Drummer Indicted

INDICTMENT IN BATON ROUGE, LOUISIANA, ON CHARGES OF CONSPIRACY TO FILE FALSE CLAIMS FOR INCOME TAX REFUNDS, AND FOR MAKING FALSE CLAIMS FOR INCOME TAX REFUNDS

BATON ROUGE, LA – United States Attorney David R. Dugas announced that a 21- count indictment was returned today by a federal grand jury, charging five former employees of a nationwide retailer of athletic shoes with conspiring to file false claims for federal income tax refunds in violation of Title 18, United States Code, Section 286. DARRIN KEITH WILLIAMS, 35, of Baton Rouge, FARAUN KENNOTIS PRUITT, 32, of Houston, Texas, JOSHUA RAMON WILLIAMS, 29, of Shreveport, KARLOS D’ANDREA PATTON, 32, of Lufkin, Texas, and REGINALD DANE DRUMMER, 28, of Baton Rouge, were each charged in the conspiracy count, and all defendants were also charged with varying separate counts connected with the conspiracy, for making and causing to be made false claims for income tax refunds, in violation of Title 18, United States Code, Section 287.

The indictment alleges that between December 2001 and April 2002, the five former employees of the retail shoe store committed the fraud by causing fraudulent income tax returns to be filed over the internet, and usually with refund anticipation loans, also known as “RALs.” All RALs were sought through Santa Barbara Bank and Trust, a California bank authorized by the Internal Revenue Service to participate in such a program in order for a taxpayer to get near instant access to anticipated refund amounts. The indictment alleges approximately 107 false tax returns were caused to be filed, seeking approximately $249,188 in unauthorized funds from the United States.

The indictment charges that the defendants caused the fraudulent returns to be filed with false employment, wage, and withholding amounts listed in order to obtain money to which they were not entitled. They are charged with persuading other people to give them their names, social security numbers, and dates of birth, and asking some of those people to obtain the same type of information from others. The defendants promised money from a government program or the filing of a legitimate tax return that would get them more money than they would otherwise receive in exchange for this information. The defendants are also charged with utilizing numerous other bank accounts to receive RAL proceeds in order to avoid depositing too many RALS in one particular account.

The conspiracy count carries a maximum term of imprisonment of 10 years and a fine the greatest of twice the gross gain, twice the gross loss caused, or $250,000. Each substantive count of making or causing a false claim to be made, carries a maximum term of imprisonment of 5 years and a fine the greatest of twice the gross gain, twice the gross loss caused, or $250,000.

In addition to the conspiracy count, DARRIN WILLIAMS is charged with three substantive counts of making and causing to be made false claims for income tax refunds. If convicted of all counts he faces a maximum term of imprisonment of 25 years and a fine the greatest of twice the gross gain, twice the gross loss caused, or $1 million dollars.

In addition to the conspiracy count, PRUITT is charged with six substantive counts of making and causing to be made false claims for income tax refunds. If convicted of all counts he faces a maximum term of imprisonment of 40 years and a fine the greatest of twice the gross gain, twice the gross loss caused, or $1,750,000.

In addition to the conspiracy count, JOSHUA WILLIAMS is charged with five substantive counts of making and causing to be made false claims for income tax refunds. If convicted of all counts he faces a maximum term of imprisonment of 35 years and a fine the greatest of twice the gross gain, twice the gross loss caused, or $1,500,000.

In addition to the conspiracy count, PATTON is charged with four substantive counts of making and causing to be made false claims for income tax refunds. If convicted of all counts he faces a maximum term of imprisonment of 30 years and a fine the greatest of twice the gross gain, twice the gross loss caused, or $1,250,000.

In addition to the conspiracy count, DRUMMER is charged with three substantive counts of making and causing to be made false claims for income tax refunds. If convicted of all counts he faces a maximum term of imprisonment of 25 years and a fine the greatest of twice the gross gain, twice the gross loss caused, or $1 million dollars.

This case was investigated by special agents of the Internal Revenue Service Criminal Investigation and the U.S. Attorney’s Office for the Middle District of Louisiana, and is being prosecuted by Assistant United States Attorney Ian F. Hipwell. No court date has yet been set for the defendants to appear.

IRS Criminal Investigation, New Orleans Field Office, Special Agent in Charge Rodney E. Clarke, commented that “the object of these schemes is to defraud the government and the taxpaying public. In this case, IRS-CI identified and investigated the persons involved in this scheme. This investigation resulted in today’s indictment. The message this indictment sends is that participation in these types of fraudulent refund schemes does not pay and those involved will be vigorously prosecuted.”

NOTE: An indictment is a determination by a grand jury that there is probable cause to believe that offenses have been committed by the defendant. The defendants, of course, are presumed innocent until and unless they are proven guilty at trial.