Committing Crime While Serving Time


Jokes are often made about criminals who do some pretty heinous things and get caught red-handed on the outside. Some criminals are quite clever and seize every opportunity to swindle victims – even from behind bars. The Alaska Dispatch covers a story about a criminal, who got caught filing fraudulent tax returns for some of his prison inmates, while already serving out a 15-year prison sentence for an unrelated conviction. (It seems that the opportunity for fraud knocks on jail cell doors too.)

The story reports that a 49-year-old criminal and at least four alleged co-conspirators obtained their victims’ personal identification information and prepared false tax returns. Some 28 of the victims were fellow inmates, who were unaware that their personal information had been confiscated. (There are going to be some unhappy inmates at the dining hall tonight.) The fraud ring filed a total of 55 false returns worth more than $125,000. (Each return claimed refunds worth thousands of dollars, but kept the amount under the government’s typical review window of $10,000.)

The federal government paid $95,568 and mailed the return checks to the co-conspirators’ addresses in Anchorage, Denver and Colorado Springs. Once received, the refund checks would be cashed by forging the victims’ signatures or deposited in multiple bank accounts. The alleged partners in crime would receive a cut of the proceeds while the inmate’s portion would be sent to various people who had agreed to hold his portion until he got out of jail.

It looks like the inmate, who was already serving a 15-year sentence for a drug conspiracy conviction, is extending his prison stay. After finishing out another five years of his first sentence, the fraudster will begin another nine-year term for filing false tax returns. The lengthened sentence just goes to prove that criminals who try to swindle the federal government will pay for their crimes.

Source: Today’s ”Fraud of the Day” is based on an article titled, ”Alaska Federal Inmate Gets 9 More Years for Tax Fraud Scheme,” written by Jerzy Shedlock and published by the Alaska Dispatch on December 28, 2013.

An Alaska federal prison inmate serving a 15-year sentence has had nearly a decade of additional time behind bars added for filing false tax returns.

Forty-nine-year-old John Richard Koesterman was sentenced Friday to nine years in prison for conspiracy to defraud the U.S. government by means of mail fraud and identity theft. The inmate’s new term will begin after he’s served his previous sentence of 15 years for a drug conspiracy conviction, according to a press release from the state’s U.S. Attorney’s office.


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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.