FOR IMMEDIATE RELEASE |
MONDAY, FEBRUARY 2, 2004
TDD (202) 514-1888
FEDERAL COURT IN TEXAS ENJOINS PROMOTER OF MULTISTATE TAX SCAM
Illegal Scheme Targeted African American Entrepreneurs
WASHINGTON, D.C. - The Justice Department today announced that the U.S. District Court for the Northern District of Texas in Fort Worth has permanently barred Kelvin Bailey from promoting an illegal tax scam that targets African American business owners. The permanent injunction order, signed by Judge John H. McBryde, also bars Bailey from preparing federal income tax returns for others.
The order entered was in response to a civil suit the Justice Department filed in December 2003. The government complaint alleged that Madison, Tennessee resident Kelvin Bailey; Oklahoma City, Oklahoma resident Sherri L. Harris and Arlington, Texas resident Ebony Scott - doing business as S N K Enterprise, as well as S&K Enterprise) - charged their customers several hundred dollars to prepare and submit applications for federal minority owned business grants. Court papers alleged that the defendants never filed the grant applications, but instead without their customers' knowledge, filed amended federal income tax returns claiming bogus tax credits seeking refunds ranging from approximately $44,000 to $93,000 per return. The Internal Revenue Service prevented over $2.7 million in losses to the U.S.Treasury by identifying and disallowing these fraudulent refund claims.
The injunction against Bailey follows a permanent injunction that the court entered against Harris and S N K Enterprise earlier this month. The suit against Ebony Scott is still pending. Judge McBryde has ordered Harris and Bailey to notify their customers of the court's order, as well as provide the Justice Department with the names, addresses and phone numbers of customers and company salespersons.
"The Justice Department is continuing its efforts to stop illegal tax schemes," said Eileen J. O'Connor, Assistant Attorney General for the Justice Department's Tax Division. "Promoters of these schemes face substantial penalties, including criminal charges where appropriate."
More information on this case is available at www.usdoj.gov/tax/txdv03651.htm and www.usdoj.gov/tax/txdv04045.htm. The Justice Department has recently obtained injunctions against a number of tax scam promoters. More information about these cases is available on the Justice Department website at www.usdoj.gov/tax/TEN.htm.