FOR IMMEDIATE RELEASE|
NOVEMBER 30, 2001
TDD (202) 514-1888
JUSTICE DEPARTMENT OBTAINS INJUNCTION AGAINST RECIPIENT
OF TAX REFUND FROM 'BLACK CAPITAL INVESTMENT FUND' SCAM
WASHINGTON, D.C. – The Department of Justice yesterday obtained a preliminary injunction from a federal court in Richmond, Virginia, against Crystal Foster of New Kent County, Virginia. The order requires her to surrender $500,000 to the court. According to documents filed by the Department, she received an erroneous refund of $500,000 from the Internal Revenue Service after claiming she had made tax payments of that sum to a non-existent "black capital investment fund" of the Department of the Treasury.
Foster filed a Federal tax return for 2000 which claimed that she had made tax payments of $500,000, and sought a refund of that amount. The payments were characterized as Undistributed Long-Term Capital Gains. In subsequent correspondence with the IRS, Foster identified "US Department of Treasury Black Capital Investments" as the source of a $500,000 payment towards her tax liability and was issued a refund check on October 29, 2001, according to the testimony of Special Agent James B. Jasunas of the IRS.
United States District Judge Richard L. Williams granted the Department of Justice's request for a preliminary injunction, and directed Crystal Foster to pay the money she received into a court fund. Foster is also required to turn over any property purchased with the money—including a Mercedes automobile, and to provide an accounting of any money she is not paying over. The Order also requires people who received money from Foster from the refund to do the same.
"People have an obligation to ensure their tax returns comply with the law. Schemes that sound too good to be true usually are," said Eileen J. O'Connor, Assistant Attorney General in charge of the Justice Department's Tax Division. "The Department of Justice will take appropriate action against people who cheat American taxpayers."
In October, 2000, the Internal Revenue Service issued a notice (IR-2000-69) cautioning African-Americans to beware of anyone offering to help them file for tax credits or refunds related to reparations for slavery. No program for such credits or refunds exists. The IRS continues to investigate refund and credit scams for possible prosecution, and the Department of Justice will seek criminal penalties where appropriate.