Woman Sentenced to Five Years Following Tax Fraud Scheme

Introduction

In 2016, a woman named Mary White was sentenced to five years in prison on charges of tax fraud. White, a resident of Nevada, was found guilty of participating in a tax fraud scheme that resulted in the loss of millions of dollars to the US government. This article will detail the specifics of the tax fraud scheme, provide updates on the case, and discuss the consequences of tax fraud.

Tax Fraud Scheme

The tax fraud scheme that White participated in involved using stolen identities to file false tax returns with the IRS. According to court documents, White stole the identities of more than 300 individuals and used their personal information to create fraudulent tax returns. These fraudulent returns resulted in the issuance of more than $3 million in tax refunds to White and her co-conspirators.

White’s role in the scheme involved opening and managing bank accounts where the fraudulent tax refunds were deposited. She also recruited individuals to provide their personal information, which was then used to create the false tax returns. White was paid a fee for her involvement in the scheme, which was funded by the fraudulent refunds.

The scheme was uncovered in 2013, when the IRS noticed an unusually high number of tax returns being filed from a single location. The agency launched an investigation and eventually discovered the fraud scheme. White and her co-conspirators were arrested in 2014 and charged with multiple counts of tax fraud.

The Consequences of Tax Fraud

The consequences of tax fraud can be severe. In addition to the legal penalties, individuals found guilty of tax fraud may also be subject to civil penalties and fines. The IRS may also charge interest on unpaid taxes and may seize assets or garnish wages to collect the owed taxes.

In White’s case, the consequences were significant. In addition to the five-year prison sentence, she was also ordered to pay more than $3 million in restitution to the US government. Her co-conspirators were also sentenced to prison and ordered to pay restitution.

Update on the Case

Since her sentencing, White has been serving her prison sentence at the Federal Correctional Institution in Dublin, California. In 2018, she filed a motion for a compassionate release due to health issues. The motion was denied, and White remains in prison.

White’s case is not unique. Tax fraud is a common crime that costs the US government billions of dollars each year. In 2020, the IRS reported that it prevented more than $4 billion in fraudulent tax refunds from being issued. However, it is estimated that billions of dollars in fraudulent refunds are still issued each year.

Preventing Tax Fraud

Preventing tax fraud requires a combination of technology and good old-fashioned detective work. The IRS uses sophisticated algorithms to detect patterns of behavior that may indicate fraud. For example, if multiple tax returns are filed using the same social security number, the IRS may flag them for review.

Taxpayers can also take steps to protect themselves from identity theft and tax fraud. This includes safeguarding personal information, using strong passwords, and regularly monitoring credit reports and bank accounts for unusual activity.

Conclusion

Mary White’s case serves as a reminder that tax fraud is a serious crime with significant consequences. While the IRS has made strides in preventing and detecting fraud, it remains a significant problem. Taxpayers can take steps to protect themselves from identity theft and tax fraud, but it is ultimately up to individuals like White to decide whether or not to participate in these crimes. Hopefully, White’s case will serve as a warning to others considering engaging in similar activities.

The plan seemed perfect to the three young Sacramento women: use internet tax software like TurboTax, steal Social Security numbers, and start filing fraudulent tax returns in the hopes of getting large refunds.  However, the United States criminal justice system caught up with Tomisha McKinnee, Nadiyah Woods, and Nakia Vaughn and has now sentenced McKinnee to five years in federal prison.

The women didn’t stop with just filing a few fraudulent tax returns.  Over 280 total fraudulent returns were made by the women, using a scheme that involved a special feature of TurboTax.  The software allows tax filers to request that their money be given back to them in any of several ways.

While most people opt for checks or direct deposit into their banks, this was more difficult when using false identity information.  Instead, the women chose to have TurboTax send a debit card called a Green Dot card in their names.  The women then fraudulently activated and used the debit cards to purchase goods and services after having them sent to several different addresses throughout the Sacramento area.

The case was brought by the Internal Revenue Service after discrepancies were noted, including a large number of tax refunds going to the same addresses.  Many victim taxpayers were robbed of their identities and were initially unable to claim their refund amounts because they had already been claimed by McKinnee, Vaughn, and Woods.  In total, the tax refunds that McKinnee, Woods, and Vaughn attempted to receive were worth just over $1.3 million.  Out of that, nearly one million dollars was actually sent by the IRS to McKinnee and her co-conspirators.

When the three women were caught and indicted, it was found that two of them were already on probation for other, unrelated offenses.  Wood and Vaughn have both pled guilty, and their sentences will be delivered in early to mid December.

In addition to serving five years in prison and another three years on a supervised release program, McKinnee is to pay restitution in the amount of $962,079, the exact amount that she and her co-conspirators were able to defraud from the Internal Revenue Service.

Woods and Vaughn are each charged with multiple counts of tax fraud and filing false claims.  It is possible that they could be sentenced to up to 35 years in prison each, but it is likely that the sentence will be significantly lower after judges examine the totality of factors of the cases in conjunction with Federal Sentencing Guidelines.

According to the IRS, the investigation and prosecution of McKinnee, Woods, and Vaughn “sends a clear message that such schemes result in significant jail time.”  E-filing has made this type of tax refund scheme increasingly common in recent years.  Tax fraud and tax evasion are serious crimes that cost the United States government hundreds of millions of dollars each year.  Most tax evasion schemes today revolve around under-reporting income, while tax fraud tends to come from identity theft.

Source: justice.gov