Oct 10th 2012
Woman Filed Fraudulent Tax Returns Seeking Refunds Using Stolen Identities of the Homeless and Disabled
Cora Cadia Ford, fifty-four, of Stone Mountain, Georgia, has been indicted by a federal grand jury on charges of mail fraud, aggravated identity theft, and filing false claims. Ford was arraigned by US Magistrate Judge Gerrilyn G. Brill on September 12, 2012, and was released on bond.
US Attorney Sally Quillian Yates said, "This defendant is accused of stealing the identities of some of our community's most vulnerable - individuals with physical or mental disabilities and the homeless. We will make every effort to bring to justice those who seek to prey on the disadvantaged."
According to Yates, the charges and other information presented in court, from at least approximately January 2007 to May 2011, Ford allegedly targeted certain individuals who she knew or believed were mentally handicapped, physically disabled, or homeless in order to obtain and use their names and Social Security numbers to file fraudulent federal tax returns seeking false refunds.
It is alleged that in some instances, Ford falsely represented to these individuals that she would use their personal identifying information to provide them with homeless benefits or obtain money from a government program for the disabled. In fact, Ford used the personal identifying information to obtain false tax refunds for her own personal benefit.
The indictment charges mail fraud, aggravated identity theft, and filing false claims. Each mail fraud count carries a maximum sentence of twenty years in prison, and each false claim count carries a maximum sentence of five years in prison. The aggravated identity theft charges carry at least one mandatory two-year consecutive sentence to any other sentence imposed. Each count also carries a fine of up to $250,000. In determining the actual sentence, the court will consider the United States Sentencing Guidelines, which are not binding but provide appropriate sentencing ranges for most offenders.
Woman Admits Participating in Scheme Seeking Millions in Phony Tax Refunds
Penny Jones of Rigby, Idaho, pleaded guilty before US District Judge William Dimitrouleas in Fort Lauderdale, Florida, to forty-one counts of causing the filing of false claims for income tax refunds and one count of conspiracy to file false claims for tax refunds income tax returns, the Justice Department and the IRS announced October 2, 2012.
Jones entered her guilty plea without the benefit of a plea agreement with the government. Jones faces a maximum potential sentence of 215 years in prison and a fine of up to $10.5 million plus restitution to the IRS.
Jones's codefendant, John Michael Smith Jr., also pleaded guilty to one count of filing a false claim for a tax refund. Smith faces a maximum potential sentence of five years in prison and a $250,000 fine plus restitution to the IRS.
According to the indictment, which was returned November 10, 2011, and which Jones does not contest, she was part of a false tax refund scheme that was national in scope, causing the filing of tax returns for at least 180 clients from thirty different states, requesting more than $120 million worth of fraudulent tax refunds. Clients of the scheme collectively filed more than 380 tax returns, mostly from tax year 2008 but also for other tax years, falsely reporting the amount of their personal debt obligations as both income and as federal tax withholding. They falsely reported this information on IRS Forms 1099-OID, which were filed by Jones based on information provided by the clients. Jones operated her tax return preparation business under the names PMDD Services LLC and Forever Grace LLC.
Smith, a resident of Hidden Hills, California, and a former resident of Cincinnati, has admitted that he filed a false 2007 individual income tax return prepared by Jones. He sought a fraudulent tax refund of $208,312, which the IRS mistakenly paid. As part of his plea agreement, Smith agreed that he filed or caused the filing of more than $7 million worth of these false "OID" claims with the IRS. Previously, another PMDD Services client, Philip Butcher, formerly of Rogers, Arkansas, pleaded guilty to one count of filing a false claim for a refund. According to court documents in that case, Butcher filed two tax returns reporting his loans as OID income and tax withholding, claiming tax refunds totaling $1,456,696.
Source: US Department of Justice