Man sentenced for eight-year tax fraud

Date: Jan. 23, 2026

Contact: newsroom@ci.irs.gov

HOUSTON – A local man has been sentenced for filing fraudulent and false statements on his federal tax returns causing a quarter of a million in losses, announced U.S. Attorney Nicholas J. Ganjei.

Joseph Patrick Butler pleaded guilty April 23, 2025.

U.S. District Judge Sim Lake has now ordered Butler to serve 21 months in federal prison to be immediately followed by one year of supervised release. At the hearing, the court heard how Butler provided false wage and withholding information in his tax returns over a span of eight years to induce the IRS to pay him refunds. The fraudulent refunds were Butler’s primary source of income during this timeframe, and he affirmatively sought to claim these refunds even after the IRS caught on to his scheme and placed a hold on payments.

In handing down the sentence, the court noted that Butler’s conduct was particularly willful and involved year after year of false submissions. The court also stated that “eight years of continuous fraud cries out” for an appropriately significant sentence.

Butler admitted that, for the 2013 to 2020 tax years, he filed false joint Form 1040 U.S. Individual Income Tax Returns and received inflated tax refunds to which he was not entitled. As part of the plea, Butler acknowledged creating shell companies that issued W-2 forms to himself, falsely reporting hundreds of thousands of dollars in wages and significant tax withholdings each year.

In reality, he earned no such wages, and no taxes had been withheld. Butler’s scheme resulted in a total tax loss of over $260,000 in fraudulent refunds.

He was permitted to remain on bond pending and voluntarily surrender to a Federal Bureau of Prisons facility to be determined in the near future.

IRS Criminal Investigation conducted the investigation. Assistant U.S. Attorneys Brad Gray and Shirin Hakimzadeh prosecuted the case.

IRS Criminal Investigation (IRS-CI) is the law enforcement arm of the IRS, responsible for conducting financial crime investigations, including tax fraud, narcotics trafficking, money laundering, public corruption, healthcare fraud, identity theft and more. IRS-CI special agents are the only federal law enforcement agents with investigative jurisdiction over violations of the Internal Revenue Code, obtaining a 90% federal conviction rate. The agency has 19 field offices located across the U.S. and 14 attaché posts abroad.