US: guilty plea in tax fraud case
A woman from the Bronx, New York has pleaded guilty to conspiracy to making false claims and mail fraud, the Justice Department announced. But an otherwise mundane case study turns out to have a hilarious bite at the end.
The US Justice Department said in a statement that the indictment alleged that between approximately 1 May, 2003, and 28 February, 2005, Sharon Smith and others participated in a scheme to file false and fraudulent individual income tax returns in the names of individuals who were not entitled to the refunds that were claimed.
Sharon Smith, along with Odell Folks (it's a name, not a capitalised adjective), Tanya Smith and Keith Terry were indicted on 26 November, 2008 for a scheme to file false claims for refunds with the Internal Revenue Service (IRS) using names of clients of the New York City Human Resources Administration (HRA) and the Centre for Employment Opportunities (CEO).
Terry, a resident of Dallas, Georgia (yes, not the famous one in Texas), pleaded guilty to the false claims conspiracy and a false return charge on 29 January, 2009. On 6 March, 2009, Folks and Tanya Smith pleaded guilty.
Folks pleaded guilty to the false claims conspiracy and mail fraud counts as well as to a count of making and subscribing a false return. Tanya Smith pleaded guilty to the false claims conspiracy count.
The refund cheques were mailed to addresses selected by Odell Folks. Folks, Sharon Smith, Tanya Smith and Keith Terry conspired to deposit the cheques, conceal the nature, source, location, ownership or control of the proceeds (i.e. launder them), and keep all or a portion of the proceeds for themselves.
The indictment further also that Folks failed to report the income that he received from his scheme on the income tax returns that he filed for 2003, 2004 and 2005.
And that's the fantastic irony that Folks was charged with failing to declare for tax purposes money defrauded from the tax authorities.
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