Examples of Questionable Refund Investigations - Fiscal Year 2017

Notice: Historical Content
This is an archival or historical document and may not reflect current law, policies or procedures.

The following examples of Questionable Refund Investigations are written from public record documents on file in the courts within the judicial district where the cases were prosecuted.

Florida Man Sentenced for Tax Fraud and Identity Theft
On April 14, 2017, in Tallahassee, Florida, Roosevelt Williams Jr., of Miami, was sentenced to 60 months in prison and ordered to pay $207,882 in restitution for filing fraudulent federal income tax returns. In October 2011, Williams was caught on Florida State University’s campus with 14 debit cards in other people’s names. In July 2013, he was stopped for speeding near the Atlanta airport. During a search of the vehicle, 18 debit cards issued in the names of other people, as well as a loaded pistol and $14,300 in cash were discovered. Each of the debit cards reflected a fraudulent attempt to obtain a tax refund based upon another person’s identity. A laptop computer and documents seized in Atlanta contained more than 100 stolen identities, as well as numerous visits to tax return filing websites and to websites where details of identity could be verified.

Texas Man Sentenced for Mail Fraud, Tax Fraud and Identity Theft
On April 13, 2017, in Austin, Texas, David Akharume Afenkhena was sentenced to 65 months in prison, three years of supervised release and ordered to pay $50,961 in restitution for stealing mail and the personal identification information (PII) from hundreds of victims. Afenkhena admitted that in 2016 he used a United States Postal Service (USPS) “Arrow Key” to gain access to the contents of mail boxes located at various apartment complexes in and around Austin. Afenkhena then changed the victims’ true mailing address to mailboxes he could access. He then used the stolen PII to open credit card accounts and bank accounts in victims’ names associated with the new fraudulent addresses. He also used the stolen PII to file fraudulent income tax returns and receive the refund checks in the mail.

New Jersey Man Sentenced for Tax Scam  
On April 12, 2017, in Newark, New Jersey, Winfred Moses, of East Orange, was sentenced to 26 months in prison, three years of supervised release and was ordered to pay restitution of $200,045. From 2013 through August 5, 2014, Moses, co-conspirator Reginald Eaford, also of East Orange, and others conspired to file bogus federal tax returns in order to fraudulently obtain tax refunds. Eaford was an inmate at the Essex County Correctional Facility from approximately May 20, 2013 through February 12, 2014. As part of the scheme, Eaford, Moses, and others obtained social security numbers, dates of birth, and other information from inmates at the jail. Eaford and Moses would then generate false W-2 forms indicating that the inmates had earned income during the relevant tax year and that federal income tax had been withheld from their paychecks. Afterwards, Eaford and Moses filed false federal income tax returns on behalf of the inmates and had the refund checks sent to the Essex County Correctional Facility or to Moses’s residence. The proceeds of the fraud were split among Eaford, Moses, and the relevant inmates. Eaford and Moses admitted that they filed 112 phony tax returns that sought approximately $670,206 in fraudulent refunds. Eaford previously pleaded guilty and awaits sentencing.

Pennsylvania Man Sentenced for Defrauding the IRS
On April 10, 2017, in Philadelphia, Pennsylvania, Ahmed Kamara, of Collingdale, was sentenced to 84 months in prison for his role in tax fraud. Kamara and five co-conspirators were charged with conspiring to file false federal tax returns for themselves and others. As a manager of Medmans Financial Services, a tax preparation business operating out of Philadelphia, Kamara prepared fraudulent federal income tax returns for himself and his clients. From 2008 to 2013, Kamara obtained names, dates of birth, and social security numbers of children in foster care, and falsely claimed that these children were the dependents on the fraudulent federal income tax returns he prepared for himself and his clients. Over this period of time, Kamara prepared 1,217 returns which resulted in a tax loss to the Internal Revenue Service of approximately $7,972,093.

Florida Men Sentenced for Identity Theft and Filing False Tax Returns
Between April 10 and March 28, 2017 in Tampa, Florida, Maurice Rahmaan, Larry Chance Cox and Anthony Michael Harris were sentenced to 61, 84 and 72 months in prison, respectively, for conspiracy and aggravated identity theft. Restitution of $63,332 will be paid joint and severally by the three men. Harris worked at a pediatric gastroenterology practice where he had access to patient medical records that contained the personally identifiable information (“PII”) of the practice’s patients, their parents and guardians. Harris conspired with his co-defendants, Cox and Rahmaan, to steal the PII from his employer so that Cox, Rahmaan, and others could use that information to apply for credit cards online and file fraudulent federal income tax returns. Investigators recovered the PII of more than 13,000 individuals that Harris stole and was used to apply for unauthorized credit cards. They also attempted to file approximately 180 fraudulent federal income tax returns.  

California Man Sentenced for False Claims in Tax Refund Scheme
On March 28, 2017, in Sacramento, California, Kenneth Knockum, of Vallejo, was sentenced to 46 months in prison for filing false claims against the United States. Knockum prepared and filed tax returns claiming massive amounts of a particular kind of investment interest income, known as Original Issue Discount (OID) income. He also claimed that large portions of such income were withheld by financial institutions and paid to the Internal Revenue Service. The returns sought large refunds of such income — one return requested a refund of over $1.4 million, and another made a claim for over $500,000. Through a complex process, Knockum generated false 1099-OIDs and other tax forms to support the claimed income and taxes and filed those documents utilizing an IRS electronic filing system that requires special software and is used primarily by financial institutions and brokerage firms. The IRS caught the majority of the false returns and declared the claims to be frivolous.

Montana Man Sentenced for Obstructing the IRS
On March 24, 2017, in Missoula, Montana, Steven D. Pjevach, a former resident of Nevada, was sentenced to 36 months in prison, one year of supervised release and ordered to pay $239,337 in restitution to the IRS for interfering with the internal revenue laws. From March 2010 through September 2014, Steven D. Pjevach filed tax returns seeking refunds using personal identification information (PII) that he gathered through phony help-wanted advertisements that he posted on Craigslist.  The filings directed the IRS to send the fraudulent refunds to bank accounts in Pjevach’s name and the names of other individuals who Pjevach supplied with false information in order to permit him to use their accounts.

Michigan Man Sentenced for Tax Fraud and Conspiracy to Commit Financial Institution Fraud  
On March 21, 2017, in Grand Rapids, Michigan, Andrew Helsel was sentenced to 37 months in prison and ordered to pay $612,431 in restitution. Helsel had previously pleaded guilty to conspiracy to commit financial institution fraud and filing a false and fraudulent tax return. According to court documents, Helsel engaged in a scheme to defraud federally-insured financial institutions by making false statements on loan application documents in order to obtain loans from those institutions. He also filed fraudulent tax returns with the IRS on behalf of himself, a company he controlled, and other taxpayers. He used those ill-gotten gains to fund his lifestyle.

Florida Family Members Sentenced for Tax Fraud
On March 20, 2017 in Tampa, Florida, Elise Ellis was sentenced to 18 months in prison and six months’ home detention for conspiracy to commit tax fraud and aggravated identity theft. On March 7, 2017, Ellis’ sons, Keith Godbolt and Paul Johnson were sentenced to 42 and 48 months in prison, respectively, for conspiracy to commit tax fraud and aggravated identity theft. As part of their sentences, the three will jointly pay money judgments in the amount of $221,000, representing the proceeds of the tax fraud conspiracy. From August 2011 through April 2013, Godbolt, Johnson and Ellis conspired to commit wire fraud, theft of government property, and identity theft by electronically filing fraudulent tax returns in other people’s names, using their social security numbers. The fraudulent tax refunds were directed to bank accounts in defendants’ names, or in some cases, to debit cards they controlled. The trio then withdrew the fraudulent refunds by writing checks or otherwise transferring funds to each other through bank transfers or cash withdrawals. Most of the fraudulently filed tax returns claimed unusually high taxable interest or dividend income, many using the exact same figure, with a large withholding amount, and a false occupation listed for the taxpayer. Many of the victims were deceased when their false tax return was filed.

Florida Man Sentenced for Tax Fraud and Retaliating Against IRS Officials
On March 16, 2017, in Los Angeles, California, Taquan Gullett, aka “Maalik Rashe El,” of Jacksonville, Florida, was sentenced to 77 months in prison. Gullett filed a 2009 income tax return, in which he claimed that he earned $52,591 in wages as an exercise physiologist and falsely stated that he generated $221,306 in interest income, all of which had been withheld as federal income tax payments. Gullett claimed that he was due a tax refund of $149,296, and requested that the refund be paid to his account at a Los Angeles-based credit union. Gullett also submitted several fake IRS Forms 1099, many of which were handwritten by Gullett, to support his fraudulent tax refund claim. When the IRS  determined that Gullet’s 2009 tax return was frivolous and denied his claim for refund, Gullett retaliated by filing a “commercial lien” with the California Secretary of State, where Gullett falsely asserted that the Treasury Inspector General for Tax Administration, the then-IRS Commissioner and other IRS employees owed him over $20 million for his “lawful 2009 claim refund.”

Colorado Woman Sentenced for Tax Fraud Scheme
On March 14, 2017, in Kansas City, Missouri, Kalena Latoya Winston, of Colorado Springs, Colorado, was sentenced to 63 months in prison and ordered to pay $254,893 in restitution to the IRS. Winston solicited clients who lived in Colorado, Kansas and Tennessee, and prepared and submitted their returns electronically. Winston’s scheme was to include false Schedule C businesses on her clients’ returns in order to increase the amount of the refunds by qualifying them for, or maximizing, the Earned Income Tax Credit. Winston also occasionally claimed false dependents on the tax returns. On two occasions, Winston used the personal identifying information the client provided her for the 2010 tax year in order to file a return without that client’s knowledge or permission for the following tax year. Winston received debit cards containing the tax refunds from the false returns. Instead of listing her clients’ address on the returns, Winston listed the addresses of her co-conspirators so that she could maintain control over the refunds.

Wisconsin Woman Sentenced for Tax Fraud Scheme
On March 14, 2017, in Green Bay, Wisconsin, Billie Jo Bottine, of Neenah, was sentenced to 48 months in prison, three years of supervised release and ordered to pay $186,414 in restitution to the Internal Revenue Service. Bottine filed more than 70 false federal income tax returns in the names of 32 different people between 2009 and 2014. To prepare these false returns, Bottine unlawfully used the names, dates of birth, and social security numbers of various individuals and children. She created fake W2 forms and fake Schedule C forms that she attached to the filings in an effort to obtain fraudulent tax refunds.

Rhode Island Women Sentenced in Multi-Million Dollar Identity Theft, Tax Fraud Scheme
On March 10, 2017, in Providence, Rhode Island, Erika Tomasino and Doris Morel, both of Central Falls, were each sentenced to 36 months in prison. Tomasino was ordered to pay $1,817,431 in restitution. Morel was ordered to pay $1,225,580 in restitution. Tomasino was a bookkeeper and secretary for Juan Vasquez, of Providence. Vasquez, a businessman, was the mastermind behind a long-running scheme run out of his business, the former Dominican Supermarket. Doris Morel was a full-time cashier at the former Dominican Supermarket in Pawtucket. For nearly four years, beginning in January 2010, the defendants participated in a scheme in which they used the stolen identities of more than 400 individuals on fraudulent tax returns resulting in the theft of more than $2.6 million in fraudulent tax refunds. Vasquez, along with other co-conspirators, was sentenced in 2016.

Rockford Woman Sentenced For Federal Tax Fraud, Identify Theft
On February 28, 2017, in Rockford, Illinois, Crystal S. Jackson, of Rockford, was sentenced to 51 months in prison, three years of supervised release and ordered to pay $200 in special assessments and pay the United States Treasury $99,479 in restitution. Jackson admitted that, between 2011 and 2013, she prepared and filed 45 false federal individual income tax returns in the names of other individuals without their permission, causing fraudulent claims for refunds to be made against the United States Treasury. Jackson admitted that as a result of her fraud, the IRS issued refunds in the total amount of $99,479.

Twin Cities Man Sentenced For Filing Fraudulent Tax Returns
On February 10, 2017, in Minneapolis, Minnesota, Julius Lee Boston was sentenced to 41 months in prison, three years of supervised release and ordered to pay restitution of $64,139 to the IRS. Between July 2011 and at least August 6, 2012, Boston filed almost 100 fraudulent income tax returns with the IRS seeking approximately $135,000 in refunds. In order to file the fraudulent income tax returns, Boston convinced various people to provide him with their personal identifying information (PII) to use in filing the returns. He filed returns in the names of those individuals, which reported false or inflated W-2 wage income, false withholding amounts, and other fraudulent information. The IRS paid more than $64,000 in tax refunds, which Boston had mailed to his home or other addresses to which he had access. He later shared a portion of the proceeds of his fraud with the taxpayers who had provided him with their PII.

Tax Return Preparer in $6.6 Million Scheme Sentenced for Tax Fraud, Identity Theft
On February 9, 2017, in Miami, Florida, Paganini Fleurantin, of Miami, was sentenced to 65 months in prison and ordered to pay, joint and several, restitution of $86,082. Fleurantin was the final tax return preparer in a multi-defendant scheme that claimed more than $6,663,976 in fraudulent tax refunds from the IRS. Fleurantin and his co-defendants filed tax returns using stolen identities to claim fraudulent refunds.  In 2016, 10 other defendants received sentences ranging from 78 months to 21 months for their roles in the scheme.

Miami Man Sentenced for Stolen Identity Tax Fraud Scheme
On February 7, 2017, in Miami, Florida, Raphael Oswald was sentenced to 74 months in prison for his participation in a stolen identity tax fraud scheme. In August 2013, law enforcement began investigating Oswald for identity theft charges related to his use of the stolen identity of a woman to purchase and finance two vehicles in New York. During the course of the initial identity theft investigation, a separate tax refund fraud scheme involving Oswald was discovered. Oswald possessed and used stolen personal identifying information (PII) of numerous individuals, and used the information to file fraudulent tax returns and collect tax refunds. More than 100 fraudulent federal tax returns were filed and unlawful refunds totaling $139,308 were directed into bank accounts in the name of Oswald’s company. Oswald then made a series of cash withdrawals from the bank accounts for personal items.

Mississippi Woman Sentenced for Mail Fraud, Identity Theft
On February 6, 2017, in Monroe, Louisiana, Andrea W. White, of Jackson, was sentenced to 26 months in prison, three years of supervised release and ordered to pay $195,296 in restitution for identity theft and tax fraud.  From January 6, 2012 to September 25, 2012, White conducted a scheme to electronically file 100 fraudulent income tax returns using stolen identities. Most of the refunds were then mailed to four post office boxes in Tallulah. On April 27, 2012, the IRS mailed one such refund check to a post office box in the name of an innocent taxpayer for $5,454. White received the benefit of that federal tax refund.

Florida Man Sentenced for Stolen Identity Refund Fraud
On February 2, 2017, in Tampa, Florida, Adrian Lark was sentenced to 72 months in prison for theft of government funds and aggravated identity theft. Between May 2011 and May 2013, Lark obtained the personal identifying information (PII) of others and then used it to file fraudulent tax returns with the IRS. During a search of his residence, law enforcement officers discovered notebooks of PII, as well as debit cards in other individuals’ names. The investigation revealed that Lark had filed more than 200 fraudulent tax returns requesting approximately $1.2 million in fraudulent tax refunds.

Texas Tax Return Preparer Sentenced for Tax Fraud/Identity Theft Scheme
On January 26, 2017, in Tyler, Texas, Jefferson Kincade, of Palestine, was sentenced to 102 months in prison for tax fraud and aggravated identity theft. Kincade also agreed to a cash forfeiture of $110,919. Kincade prepared tax returns for individuals at a tax preparation business, EZ Tax, and devised a scheme to prepare false tax returns, steal clients' refunds, and use the clients' and other individuals' identities to accomplish the theft.  Kincade's made false statements and representations in the tax returns that he submitted in order to increase the amount of tax refunds to which the taxpayer would be entitled.  Kincade was able to intercept the government tax refunds for his own benefit by printing the refund checks, not giving them to his clients, and then cashing them with the assistance of two individuals who were not associated with EZ Tax.  

Unauthorized California Tax Shop Owner Sentenced for Tax Fraud
On January 25, 2017, in San Francisco, California, Josiah Larkin was sentenced to 37 months in prison, three years of supervised release and ordered to pay $184,798 in restitution.  Larkin set up an unauthorized franchise, Colbert Ball Tax, and advertised “Get Up to $600- Even if Unemployed, On SSA or SSI.” Larkin filed false tax returns reporting that taxpayers with $0 income had paid $4,000 in qualified education expenses to attend college. This combination of income and expenses resulted in a $1,000 tax refund based on the American Opportunity Tax Credit. Larkin took approximately half of the $1,000 tax refund and gave the remaining half to his clients.  

Illinois Business Owner Sentenced for Identity Theft, Filing False Tax Returns
On January 17, 2017, in Chicago, Illinois, Carlos Smith was sentenced to 60 months in prison, two years of supervised release and ordered to pay $633,884 in restitution to the IRS. From approximately January 2011 through April 2015, Smith operated CLS Financial Services Inc, a business that offered credit repair or credit card processing services. Smith stole personal identifying information (PII) obtained from clients and used the information to file false individual income tax returns. Smith also stole identities of individuals who worked for Chicago’s Board of Education and used this information to file false individual income tax returns. Smith filed approximately 92 fraudulent income tax returns, claiming more than $1 million in refunds. Smith directed the fraudulently obtained tax refunds to prepaid debit cards, addresses and bank accounts he controlled, including accounts opened in the names of individuals whose identities he had stolen. Smith also filed his own false individual income tax returns for 2012 through 2014.  

Iowa Woman Sentenced for Income Tax  and Housing Assistance Fraud
On December 28, 2016, in Cedar Rapids, Iowa, Kaeisha Robinson, from Phoenix, Arizona, and formerly of Maquoketa and Dubuque, Iowa, was sentenced to to 84 months in prison, three years of supervised release and ordered to make $336,380 in restitution to the Internal Revenue Service and $12,143 in restitution to the Eastern Iowa Regional Housing Authority. Robinson admitted that from May 2011 to February 2013, she filed numerous false and fraudulent tax returns in both her own name and the names of others, some of whom were unaware that Robinson was using their identities to file fraudulent returns. Robinson also admitted that as a result of these fraudulent returns, she received tax refunds from the IRS to which she was not entitled and stole money from the government. Robinson also admitted that from October 2011 through July 2013, she lied on forms in order to receive $12,143 in Section 8 housing assistance.

Nevada Man, Missouri Woman Sentenced For Tax Refund Conspiracy
On December 21, 2016, in Kansas City, Missouri, Theresa R. Gee, of Kansas City, and Nathaniel J. Justice, of Las Vegas, Neveda, but formerly of Kansas City, were sentenced to 20 months and 40 months in prison, respectively, for their roles in a tax refund conspiracy. Gee and Justice were also ordered to pay $93,951 in restitution, jointly and severally. Gee and Justice devised a tax refund scheme that used the creation of false W-2 forms and providing them to others (“filers”). These filers then fraudulently filed for federal and state income tax returns using the W-2s. Sometimes Gee and Justice escorted the filer inside H&R Block and assisted the filer in the preparation of the fraudulent tax forms. Gee and Justice recruited filers into the conspiracy through personal contacts. Conspirators promised each filer a portion or percentage of the illegally obtained refund. The filers requested the fraudulent tax refunds be deposited onto Emerald Cards, which Gee and Justice retained. Gee and Justice withdrew the refunds, gave a portion of each refund to the filer and kept a substantial portion for themselves. Gee and Justice also paid a fee to those who referred a filer who was willing to participate in the scheme.

Maryland Man Sentenced for Using Stolen Identifying Information to File False Income Tax Returns
On December 20, 2016 in Washington, DC, Kevin Brown, of Capitol Heights, Maryland, was sentenced to 135 months in prison and ordered to pay restitution in the amount of $4,543,659 to the Internal Revenue Service. Brown was a key organizer and leader of an extensive network of more than 130 individuals who ran identity theft and tax fraud scheme that falsely sought more than $20 million in refunds. For tax years 2005 through 2012, this group filed false tax returns in the names of individuals, whose identities had been stolen, including the elderly, people in assisted living facilities, drug addicts and incarcerated prisoners. False tax returns were also filed in the names of, and refunds were issued to, willing participants in the scheme.  The returns filed listed more than 400 “taxpayer” addresses located in the District of Columbia, Maryland and Virginia. The false returns typically reported inflated or fictitious income from a sole proprietorship and claimed phony dependents to generate an Earned Income Tax Credit, a refundable federal income tax credit for working families with low to moderate incomes.

Tallahassee Woman Sentenced for Tax Fraud
On December 16, 2016, in Tallahassee, Florida, Lydia Jennine Thomas, of Tallahassee, was sentenced to 24 months and one day in prison for theft of public money and aggravated identity theft.  Thomas admitted that, between 2012 and 2014, she knowingly prepared and electronically filed fraudulent tax returns. The personal identifying information that Thomas used on the tax returns came from homeless people, inmates, and Thomas’s family members. The tax returns typically claimed false income that generated refunds of approximately $6,000.  Thomas established recipient addresses, such as abandoned houses and rental properties, and directed the refunds to arrive in the form of treasury checks and debit cards.

Ivory Coast Diplomat Sentenced for Conspiracy and Tax Fraud
On December 9, 2016 in Alexandria, Virginia, Koissy Thomas Kemmeth, of New York, New York, was sentenced to 15 months in prison, three years of supervised release, ordered to forfeit $37,000 and pay restitution of $105,000. From 2010 through February 2015, Kemmeth worked as a driver for the Ivory Coast Mission to the United Nations where he worked with Kouame Tanoh, another Ivory Coast citizen. The two developed a scheme to defraud others of money and property. During that time, Kemmeth assisted Tanoh in the preparation and electronic filing of false and fictitious federal and state income tax returns to receive fraudulent refunds. Kemmeth also provided his bank account information to Tanoh in order to have the fraudulent refunds deposited into the account.  With Kemmeth’s knowledge and consent, Tanoh also used the Ivory Coast Mission’s mailing address on some of the fraudulent income tax returns in order for Kemmeth to collect the refunds.

Houston Man Sentenced in Stolen Identity Refund Fraud Scheme
On December 5, 2016 in Houston, Texas, Antolin Julio Nazario, aka Robinson Gomez Churon, was sentenced to 92 months in prison, three years of supervised release and ordered to pay $807,096 in restitution for his role in a sophisticated tax fraud/identity theft scheme involving more than 800 victims. Nazario’s wife, Thalia Diaz Camareno, aka Irene Carrero Echevarria, was also convicted for her role in the scheme and will be sentenced at a later date. From approximately June 2010 to January 2012, the couple used stolen and unlawfully obtained personal identity information (PII) of true persons to prepare fraudulent U.S. income tax returns. Nazario and Camareno mailed the fraudulent federal income tax returns through the U.S. Postal Service in order to generate and obtain tax refunds from the IRS to which they were not entitled and directed the fraudulently obtained tax refunds be disbursed as U.S. Treasury checks. The refunds were then used to obtain cash and goods for their own benefit. The current fraudulent tax refund filings attributed to this couple have resulted in $4,095,959 potential loss, an excess of $800,000 paid out by the IRS and involves more than 800 victims whose identities were stolen to conduct the scheme.

Winter Haven Man Sentenced for Stealing Tax Refunds and Identity Theft
On November 30, in Tampa, Florida, Daniel White was sentenced to 84 months in prison for his role in a stolen identity refund fraud scheme. White was also ordered to pay a money judgment for $320,703, which are the losses to the United States Treasury. White was found guilty in August 2012, but before he could be sentenced, he absconded.  In July 2016, law enforcement officers located White in Polk County and arrested. From May 2011 until October 2011, White used stolen personal identity information from at least 39 victims, many of whom were deceased, to prepare and file tax returns without their knowledge or consent. White then directed the IRS to electronically deposit the fraudulent refunds into a bank account that he controlled.  

Kansas Tax Return Preparer Sentenced for Aggravated Identity Theft and Stealing Government Funds
On November 29, 2016, in Kansas City, Missouri, Richard Drake, a Stillwell, Kansas, tax return preparer was sentenced to 48 months in prison, three years of supervised release and ordered to pay $2,432,147 in restitution to the IRS, and $98,087 to the Kansas Department of Revenue. Drake used three of his clients’ personal identities to file false federal income tax returns that claimed inflated refunds. As part of his scheme, Drake prepared accurate federal income tax returns for these clients, which he provided to them but did not file with the Internal Revenue Service (IRS). He then had these clients make estimated tax payments to the IRS during the year. Once it was time to file on behalf of his clients, Drake filed false tax returns with the IRS that underreported his clients’ income and claimed false expenses in order to generate large income tax refunds which he directed to accounts under his control.

Tampa Man Sentenced In Stolen Identity Refund Fraud Scheme
On November 18, 2016, in Tampa, Florida, Cedric Clark was sentenced to 102 months in prison and ordered to pay restitution of $1,933,862 to the IRS. Between October 2010 and June 2013, Clark engaged in a fraud scheme involving the filing of false and fraudulent income tax returns in the names of living and deceased individuals. Clark and his co-conspirators received approximately $1.9 million in tax refund checks from the IRS. They had filed returns requesting refunds of almost $6 million.

Minnesota Couple Sentenced For Multi-Million-Dollar Income Tax Refund Fraud Scheme
On November 17, 2016, in St. Paul, Minnesota, Mark Arlin Hammerschmidt, and his wife, Ornella Angelina Hammerschmidt, of Prior Lake, were sentenced to 135 months and 48 months in prison, respectively. In addition Mark Hammerschmidt was ordered to pay $1,832,986 in restitution and Ornella Hammerschmidt was ordered to pay $45,365 in restitution, for their roles in orchestrating a multi-million-dollar tax fraud scheme. From January 2011 through February 2013, Mark and Ornella Hammerschmidt operated an immigration and tax preparation business, called American Group, located in Shakopee, Minn. and Winter Garden, Fla., which they utilized to prepare and file more than 1,000 fraudulent federal income tax returns. The defendants attracted customers to American Group by misrepresenting their professional credentials and certifications. Most notably, Ornella Hammerschmidt falsely represented herself as a licensed immigration attorney. As part of the scheme, the defendants attempted to conceal their involvement as fraudulent return preparers by intentionally not signing the tax returns on the part of the form meant to be signed by paid preparers. The defendants also falsely reported their business addresses and bank accounts controlled by them as the addresses and bank accounts of their taxpayer clients. In connection with this part of the scheme, the defendants sought approximately $200,000 in fraudulent tax refund payments. Many of the defendants’ clients were non-or-limited English speakers, who relied on the defendants to properly and legally prepare their taxes. The false returns filed on behalf of the taxpayer clients caused substantial harm to them, both in terms of problems with the IRS and problems with immigration status. In addition, tax returns were filed by Mark Hammerschmidt who obtained the personal identification information (PII) of hundreds of Guatemalan citizens. Mark Hammerschmidt then prepared and filed with the IRS applications for Individual Taxpayer Identification Numbers (“ITINs”) in the names of the Guatemalan citizens. Once he obtained the ITINs, Mark Hammerschmidt filed multiple years’ worth of false tax returns in the Guatemalan citizens’ names, seeking refunds based on false information. Mark Hammerschmidt also used the PII to file false Minnesota state income tax returns. In connection with this part of the scheme, the defendant sought approximately $1.8 million in tax refunds based on the fraudulent tax returns he filed.

South Carolina Woman Sentenced for Tax Fraud Scheme
On November 10, 2016, in Montgomery, Alabama, Willie May Ford, of Lamar, South Carolina, was sentenced to 51 months in prison, three years of supervised release and ordered to pay restitution of $1,672,971 for access device fraud. Ford and another individual used counterfeit travelers’ checks to purchase items at two separate stores, which led to their arrest. Numerous traveler’s checks, credit and debit cards, and pieces of personal identifying information were seized from the vehicle that Ford had traveled in to Alabama. A subsequent investigation revealed that the personal information of over 400 individuals was used to file fraudulent federal income tax returns.

Supermarket Owner, Accomplice Sentenced in Identity Theft, Tax Fraud Scheme
On November 4, 2016, in Providence, Rhode Island, Juan Vasquez was sentenced to 72 months in prison, three years of supervised release and ordered to pay $2,682,042 in restitution to the IRS. Vasquez was the mastermind behind a long-running scheme to use the stolen identities of more than 400 individuals on fraudulent tax returns resulting in the receipt of more than $2.6 million in fraudulent tax refunds. Vasquez ran the scheme out of his business, the former Dominican Supermarket in Pawtucket. Vasquez’ sister, Belkis Vasquez, of Central Falls, was sentenced to three years of probation and ordered to pay restitution to the IRS of $325,490 for her participation in the conspiracy. Doris Morel, a full-time cashier at the Dominican Supermarket, and Erika Tomasino, a secretary for Juan Vasquez, were also convicted for their participation in the conspiracy. Morel and Tomasino are scheduled to be sentenced at a later date.

Michigan Man Sentenced for Filing False Claims
On November 2, 2016, in Detroit, Michigan, Deandre Elliott, of Detroit, was sentenced to 24 months in prison and ordered to pay $183,099 in restitution to the IRS. Elliott was in possession of victims’ personal identifying information and he filed false tax returns using this information. Several victims testified they never authorized Elliott to file returns on their behalf and most were unaware tax returns were filed in their names. The fraudulent tax returns contained wages from employers for which the victims were never employed and other tax credits. Elliott sought to have the fraudulent refunds deposited into accounts under his control.

Two Florida Residents Sentenced for Stolen Identity Refund Fraud Scheme
On October 27, 2016, in Miami, Florida, Maurice Exavier, of Lauderhill, was sentenced to 145 months in prison and three years of supervised release. Carline Maurice was sentenced to 132 months in prison and three years of supervised release. The defendants were ordered to pay, joint and several, restitution of $1,265,611.  Exavier and Maurice acquired and used the personal identifying information of deceased individuals to file false tax returns with the IRS that contained fraudulent claims for refunds. Exavier and Maurice sought payment of the refunds as Refund Anticipation Checks (RACs), checks issued by a bank for the amount of a claimed refund, minus deductions for tax preparation and other service fees, if applicable. The RACs were then printed locally at a tax preparation company where a defendant had access or control. The refund checks were then deposited into a bank account controlled by Exavier and Maurice so the funds could be used by the conspirators for personal items.

Atlanta Man Sentenced for Theft of Public Money and Aggravated Identity Theft
On October 27, 2016, Peter Isika, of Marietta, Georgia, was sentenced to 45 months in prison, three years of supervised release and ordered to pay restitution of $419,810 to the IRS for using stolen identities to fraudulently obtain income tax refunds. During 2013 and 2014, Isika filed at least 50 false income tax returns with the Internal Revenue Service using stolen identities that he purchased over the Internet. Isika directed the fraudulently obtained tax refunds to prepaid debit cards and bank accounts that he controlled.  

Tennessee Resident Sentenced for Tax Fraud and Money Laundering
On October 12, 2016, in Knoxville Tennessee, Mayra Edith Blair was sentenced to 37 months in prison and ordered to forfeit a money judgment in the amount of $2.5 million to the United States. Blair was part of a conspiracy that used phony identification documents to file fraudulent federal income tax returns in order to obtain refundable tax credits. The scheme resulted in the theft of more than $10.8 million from the U.S. taxpayers.

Florida Man Sentenced for Stolen Identity Refund Fraud Scheme
On October 6, 2016, in Tampa, Florida, Ledale Johnson of Bradenton, was sentenced to 39 months in prison and ordered to pay restitution of $57,415 to the IRS. From October 2011 through March 2012 Johnson conspired with others to file false tax returns that generated tax refunds, which were then downloaded onto prepaid debit cards in other people’s names, including deceased individuals. Johnson used the debit and prepaid cards to purchase money orders or to spend on personal items. On two separate occasions, Johnson was stopped by local law enforcement and found to be in possession of numerous fraudulent cards. Fraudulent income tax returns seeking refunds of more than $250,000 were filed, with nearly $58,000 obtained in illegal tax refunds.

Florida Woman Sentenced for Filing False Tax Returns and Identity Theft
On October 4, 2016, in Orlando, Florida, Virginia Miller was sentenced to 61 months in prison for conspiracy to steal federal tax refunds and aggravated identity theft. Miller conspired to file false federal income tax returns using stolen personal identifying information (PII), much of which belonged to individuals who were physically and mentally disabled, to obtain tax refunds from the Treasury Department. Miller prepared and filed the fraudulent returns using the stolen PII. She then directed the Internal Revenue Service to electronically deposit the fraudulent refunds into a bank account that her daughter controlled. The women withdrew the tax refunds in cash and made purchases for their own benefit and the benefit of others. During a two-year period, the Millers filed approximately 226 fraudulent tax returns and obtained $493,697 in fraudulent tax refunds from the Treasury Department.

Florida Man Sentenced in Stolen Identity Tax Refund Fraud Conspiracy
On October 3, 2016, in Fort Lauderdale, Florida, Oniel Winston Scarlett, of Belle Glade, was sentenced to 48 months in prison, two years of supervised release and ordered to pay restitution of $188,570 for his participation in a stolen identity tax refund fraud conspiracy involving students and other individuals’ personal identifying information (PII). Scarlett and his co-conspirators fraudulently obtained and exchanged amongst themselves the PII of other individuals, filed fraudulent income tax returns with the IRS using the stolen PII, and directed fraudulent refunds to be deposited onto pre-paid debit cards in the names of other individuals using the stolen PII. Scarlett was in possession of stolen PII during a traffic stop on September 20, 2011. During the traffic stop, the FHP trooper conducted a consent search of Scarlett’s vehicle and found pre-paid debit cards; printouts of hundreds of peoples’ PII; laptop/notebook computers as well as bank account information, where it was later determined that nearly $77,000 in federal tax refunds were direct deposited from 52 separate fraudulent tax returns filed with the IRS. Scarlett admitted he had been recruited to help register pre-paid debit cards that were to be used to accept the fraudulent IRS refunds.  He also admitted his role in agreeing to accept money for his role in helping complete the crime.  Some of the PII was also used to file false tax returns with the IRS.  On the computer, law enforcement found 228 separate login user identifications used to file false income tax returns claiming approximately $290,000.

Fiscal Year 2016 - Examples of Questionable Refund Investigations

Fiscal Year 2015 - Examples of Questionable Refund Investigations

 


Table of Contents - Questionable Refund Investigations