Off to Prison She Goes

36419152 - judge looking the condemned prisoner in the court room

The U.S. Tax Code is complicated, so it’s easy to understand how some individual taxpayers may inadvertently fail to comply with the tax law as defined by the IRS. (That’s why many people run to the nearest tax preparer to dump several inches of financial paperwork on a qualified professional who is willing to sort through the mess.) A Salinas, Calif., woman, who is not a qualified tax professional, attempted to complete her own tax returns. (Actually, she completed hundreds of them in other individuals’ names.) Suffice it to say, she was not an honest taxpayer who accidentally filed one incorrect tax return. She, and five others, deliberately participated in a tax refund fraud scheme that involved filing a plethora of fraudulent tax returns that ultimately fleeced the IRS out of more than $1.6 million.

Some of the ways honest mistakes are made on individual tax returns include accidentally reporting income; over-estimating non-cash deductions such as donated household goods or clothing; incorrectly itemizing deductions; reporting business expenses incorrectly, or even forgetting to file your tax return on Tax Day. The IRS is pretty forgiving of these types of mistakes as evidenced by less than one percent of taxpayers receiving a conviction for tax refund fraud. Today’s fraudster and her co-conspirators fall within that one percent.

The Salinas woman in today’s fraud article conspired with her husband and four others to use the personal information of many victims to file hundreds of bogus tax returns over two tax years. She and her gang of criminals didn’t make simple mistakes, they deliberately reported incorrect wages and fraudulently claimed dependents, expenses and tax and education credits. The IRS sent some of the illegally obtained refunds to bank accounts controlled by the co-conspirators in this case. (I’m sure that a shopping spree was enjoyed by all criminals involved.)

The 49-year-old Californian pleaded guilty to tax refund fraud and was sentenced to five years in prison. She is also required to pay more than $1.6 million in restitution for participating in the tax fraud conspiracy. But that’s not all. She is required to forfeit $736,000 and serve three years of supervised release. So far, two of her co-conspirators have been sentenced for their role in the scam. One co-defendant received 21 months in prison and must pay back more than $1.4 million to the IRS. Another got two-and-a-half years in prison and must pay back $7.5 million. Yet another person who filed about $9.7 million in fraudulent tax claims pleaded guilty to tax fraud and awaits sentencing. (No word on the husband’s punishment yet or another Salinas man who is considered a fugitive.)

While the U.S. tax code can be complicated, punishment for tax fraud is not. The bottom line in this financial debacle is that today’s fraudster will most likely never, ever receive another tax refund. It’s a pretty good guess that she’ll be paying Uncle Sam back for the rest of her life. (She owes, so off to prison she goes.)

Today’s “Fraud of the Day” is based on the article, “Salinas woman gets five years in prison for tax fraud scheme, federal prosecutors say,” published by The Californian on April 22, 2019.  

A 49-year-old Salinas woman was sentenced last month to five years in prison for her role in a tax fraud conspiracy, the U.S. Department of Justice announced.

After pleading guilty in October, Jacqueline Ramos (also known as Jackie Acosta) must also pay over $1.6 million in restitution, according to prosecutors in a March press release.

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Larry Benson
Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.