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Senior Director of Strategic Alliances
LexisNexis Risk Solutions - Government

You learn from your past mistakes. At least, most of us have been told that at least once in our lives. But here is an alarming statistic from the Marshal Project, a nonprofit journalism think-tank about criminal justice. About 45 percent of federal inmates are re-arrested within five years of release from custody. Rodney C. Smith was previously convicted in the Eastern District of Wisconsin in 2010 with conspiracy to defraud the United States by filing a false income tax return. “A” false income tax return? Well Smith rebounded from that incident with vengeance it appears. Between 2018 and 20121, Smith filed 1,338 fraudulent tax returns, costing Uncle Sam about $3.3 million.

According to court records, over the course of four years, Smith prepared fraudulent tax returns for his clients by knowingly making false representations in their returns about the clients’ dependents, wages, and income or losses from businesses. These misrepresentations qualified the taxpayers for a refundable Earned Income Tax Credit. The United States federal earned income tax credit or earned income credit is a refundable tax credit for low- to moderate-income working individuals and couples, particularly those with children. The amount of EITC benefit depends on a recipient’s income and number of children. Which sounds like Smith made up some kid’s identities along the way.

Even after the IRS executed a search warrant in 2020 at Smith’s business, and Smith admitted to agents that he was knowingly violating the federal tax laws, he persisted in his scheme by preparing his clients false returns for his clients the next year in 2021. Smith ultimately pled guilty in October 2023 to income tax fraud. On February 27, 2024, Smith was sentenced to four years in prison.

Outstanding job by the Internal Revenue Service.

Today’s Fraud of The Day is based on article “Milwaukee tax preparer gets 4 years for filing false returns that could have cost US more than $3 million” published by the Milwaukee Journal Sentinel on February 28, 2024

A Milwaukee tax specialist will spend nearly four years in prison for helping hundreds of clients prepare false returns, federal prosecutors say. U.S. District Judge Brett H. Ludwig on Tuesday sentenced Rodney C. Smith to 41 months in prison. Smith, 60, also must serve one year of supervised release when he gets out, and will have to pay $216,643 in restitution, along with a $400 special assessment.

He pleaded guilty in October to four counts of aiding, assisting, counseling, or advising the preparation of a false return. Smith previously was convicted in federal court in 2010 with conspiracy to defraud the United States by filing a false income tax return.

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