In this week’s “You Can’t Do That” I will take a look at a New Orleans woman and her prison scheme, a greedy Philadelphia preparer and an ex-IRS employee who all decided it would be a good idea to try and steal from Uncle Sam.
Thelma Jean Lee of New Orleans, Louisiana, filed 38 fraudulent returns during 2010 and 2011. Ms. Lee included false W-2s from legitimate businesses and collected $11,266 in fraudulent refunds. The kicker? Most of the 38 individuals named on the returns were located in nearby prisons during 2010 and 2011. She faces one count of fraud for each of the 38 returns. Ms. Lee found out that no fraudulent refund is too small to attract the attention of the federal government.
Crystal Graham, from Philadelphia, Pennsylvania, took her fraud a little further. Graham not only created false W-2s, but claimed additional credits, such as the First-Time Home Buyer’s Credit and the Earned Income Credit. She even had her clients give her authority to be a custodial party for their refunds. She would tell her clients their refund amount, change the return to add bogus credits, file the return with an inflated refund, then pocket the difference without the client knowing the wiser. In total, Ms. Graham was waiting on $354,000 of fraudulent refunds from the IRS. She has plenty of time to wait, as she was sentenced to a year in prison.
Rounding out these week’s list is Clive Henry, from Jamaica, New York. Mr. Henry, a former employee of the IRS, and his two cohorts attached fraudulent 1099-OIDs in order to claim taxes that were never sent to the IRS. Their clients would receive the refund and the team would collect a percentage-based fee. Over three years, this scheme was responsible for generating $3.4 million in bogus refunds. Each of the men face up to eight years in prison.
