JUSTICE DEPARTMENT FILES LAWSUIT TO STOP MULTI-STATE TAX SCAM TARGETING AFRICAN-AMERICAN SMALL BUSINESS OWNERS

Three Individuals Alleged To Have Filed Bogus Tax-Refund Claims For Customers

WASHINGTON, D.C. - The Department of Justice today announced that it has filed a lawsuit against several Texas individuals to stop the promotion of a tax scheme.

The suit, filed in the U.S. District Court for the Northern District of Texas, seeks to stop Ebony Scott of Arlington, Texas; Sherri Harris of Oklahoma City, Oklahoma; and Kelvin Bailey of Madison, Tennessee; as well as their business - SNK Enterprise, Inc. - from promoting an illegal tax scam that targets African-American business owners. The defendants allegedly sold the scheme in several states including Texas, Oklahoma and Louisiana.

According to today’s complaint, the defendants allegedly misled customers by telling them that SNK Enterprise would prepare and submit customers’ applications for federal minority-owned business grants. SNK Enterprise allegedly never filed the grant applications but instead filed amended tax returns in customers’ names seeking refunds based on claiming bogus tax credits. Each return claimed a bogus tax credit and refund exceeding $40,000.

The complaint also alleges the customers were unaware that the defendants had filed tax returns on their behalf. The defendants allegedly charged their customers a fee of several hundred dollars in addition to requiring customers to pay a percentage of any “grant” money they obtained.

“The Justice Department is moving vigorously to shut down fraudulent tax promotions,” said Eileen J. O’Connor, Assistant Attorney General for the Justice Department's Tax Division. “People should be skeptical of schemes that seem too good to be true.”

This suit is the latest in a series of cases the Justice Department has filed to stop tax-scam promoters. More information on these efforts can be found at www.usdoj.gov/tax/taxpress2003.htm <http://www.usdoj.gov/tax/taxpress2003.htm>.

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