Leader of $1.9 million fraudulent tax return scheme sentenced to 72 months in prison

 

Date: October 16, 2020

Contact: newsroom@ci.irs.gov

COLUMBUS, OHIO – Quiana Mathews of Montgomery, AL, was sentenced to 72 months in prison and was ordered to pay $1,952,896 in restitution to the Internal Revenue Service (IRS) for conspiring to file false claims for income tax refunds with the IRS. Mathews pleaded guilty to the aforementioned charge on September 4, 2019.

On October 18, 2019, co-conspirator Barbara Huffman, 57, of Montgomery, AL, was sentenced to three years of probation and was ordered to pay $263,773 in restitution to the IRS, jointly and severally with Mathews, for conspiring to file false claims for income tax refunds with the IRS.

On November 15, 2019, co-conspirator Virginia Earnest, 43, of Conway, AR, was sentenced to three years of probation and was ordered to pay $94,421 in restitution to the IRS, jointly and severally with Mathews, for conspiring to file false claims for income tax refunds with the IRS.

According to court documents, between 2012 and 2016 Mathews, Earnest and Huffman operated a seasonal tax business in Columbus, OH under the name GQ's Tax Pros LLC. The defendants filed approximately 1,221 income tax returns claiming more than $5.3 million in income tax refunds. All of the income tax returns claimed an income tax refund, approximately 93% claimed the Earned Income Credit, and approximately 75% included a Schedule C claiming self-employment income or expenses.

The defendants filed returns with false Schedule C information in order to qualify taxpayers for the Earned Income Credit. The Earned Income Credit is a tax credit ranging from approximately $400 to $6,100, which is available to low-income taxpayers who have earned income within a certain limited range. Because the credit is refundable, taxpayers who qualify for the credit can receive a refund even if they have little or no tax withholdings. For this reason, the defendants added fraudulent information to their clients' returns to maximize the refund they would receive as a result of the Earned Income Credit.

Some returns also claimed fictitious dependents to generate tax benefits.

According to the plea agreements, approximately 62% of the tax refunds generated by the returns Mathews prepared were due to fraud; approximately 81% of the tax refunds generated by returns Huffman prepared were due to fraud; and approximately 53% of the tax refunds generated by the returns Earnest prepared were due to fraud.

This conspiracy resulted in a total tax loss to the IRS of approximately $1,952,896.

"These defendants simply took liberties in falsifying information on the income tax returns they prepared to secure inflated false income tax refunds. IRS Criminal Investigation will continue to aggressively pursue those who prepare false claims for refunds," said Bryant Jackson, Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office.

Bryant Jackson, Special Agent in Charge, Internal Revenue Service Criminal Investigation, Cincinnati Field Office, announced the sentence handed down by Senior U.S. District Judge James L. Graham.

This case was prosecuted by Assistant United States Attorney Peter K. Glenn-Applegate and was investigated by special agents of IRS-Criminal Investigation.