Politicians and Criminals

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Despite popular opinion, not all politicians are criminals. However, today’s fraudsters are linked to politician wanna-be’s who are now officially considered to be criminals. Two Winston-Salem men and two aspiring politicians worked together to file 519 false tax returns in a tax fraud scheme that attempted to claim more than $1.3 million in refunds from the Internal Revenue Service (IRS).

One of the masterminds of the tax fraud scheme is a Winston-Salem lawyer, former president of the local NAACP and former magistrate. He also unsuccessfully ran for city council and as a candidate for the North Carolina House of Representatives. (It’s also important to note that the former lawyer permanently lost his license to practice law in Georgia.) His co-conspirator also had an unsuccessful run for city council. Together, these two owned a tax preparation business in the Winston-Salem area.

Court records show that the two tax preparation business owners instructed today’s fraudsters and others on how to fill out client tax returns to maximize the refund amounts. Somewhere along the way, today’s fraudsters prepared a bogus tax return for an undercover IRS agent. (Oops. The rest is history.)  

Both fraudsters each pleaded guilty to one count of aiding and assisting in the preparation and presentation of a false tax return. (Together, they prepared 222 fake tax returns seeking $570,519 in refunds.) One of the men received a sentence of nine months and one day behind bars, one year of supervised release, a $100 special assessment and is required to pay $13,646 in restitution. The other co-conspirator was sentenced to three years of probation, a $100 special assessment and is required to pay $8,629 in restitution and perform 50 hours of community service.

The lawyer, who owned two other tax-preparation businesses in Salisbury and Kannapolis, is currently serving a 13-month federal prison sentence for his part in the tax fraud scheme . He must also pay $60,800 in restitution to the IRS and serve one year of supervised release. The co-owner of the tax prep business owns an additional tax preparation business in Greensboro. She was sentenced to one year and nine months in federal prison. She’ll be paying restitution of $38,266 and will be placed on supervised release for three years following the completion of her prison term. While on supervised release, she is not allowed to help others prepare taxes. (Shouldn’t she lose the right to do that indefinitely? That’s something I would definitely vote for.)

Today’s “Fraud of the Day” is based on an article, Two Winston-Salem men sentenced in tax-fraud scheme that netted $1.3 million in fake tax refunds,” posted on journalnow.com on May 2, 2019.

Two Winston-Salem men were sentenced Wednesday in federal court for their roles in a tax-fraud scheme, resulting in fake tax returns claiming a total of $1.3 million in refunds.

Kristyn Dion Daney, 34, and Rakeem Lenell Scales, 35, each pleaded guilty in federal court in April 2018 to one count of aiding and assisting in the preparation and presentation of a false tax return. The two men had faced a possible prison sentence of at least three years in federal prison and a maximum fine of $250,000.

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Larry Benson, Senior Director of Strategic Alliances, LexisNexis Risk Solutions - Government

Larry Benson is responsible for developing strategic partnerships and solutions for the government vertical. His expertise focuses on how government programs are defrauded by criminal groups, and the approaches necessary to prevent them from succeeding.

Mr. Benson has 30 years of experience in sales and business development. Before joining LexisNexis® Risk Solutions, he spent 12 years founding and managing two software technology startups. During the 1990s he spent 10 years as a Regional Director helping to grow a New England-based technology company from 300 employees to 7,000. He started his career with Martin Marietta Aerospace working on laser guided weapons and day/night vision systems.

A sought-after speaker and accomplished writer, Mr. Benson is the principal author of “Fraud of the Day,” a website dedicated to educating government officials about how criminals are defrauding government programs. He has co-authored WTF? Where’s the Fraud? How to Unmask and Stop Identity Fraud’s Drain on Our Government, and Data Personified, How Fraud is Changing the Meaning of Identity.

Benson holds a Bachelor of Science in Physics from Albright College, and earned two graduate degrees – a Master of Business Administration from Florida Institute of Technology, and a Master of Science in Engineering from Lehigh University.