January 10, 2001

Norma Estimbo Lacy
Public Affairs Specialist
Phone: 713/567-9388 Fax: 713/718-3389

Albert A. Balboni, Assistant U. S. Attorney
Phone: 713/567-9726

(Houston) Mervyn M. Mosbacker, United States Attorney for the Southern District of
Texas, announced today that Carl Dennis Barnett, age 48, pled guilty on Tuesday to five counts of filing false and fraudulent claims for income tax refunds for 1996 and 1997 and one count of conspiracy to file false claims for refund. Barnett, who is a senior payroll clerk for the City of Houston, is currently in jail awaiting a hearing on the State's motion to revoke his state parole based on the federal fraud charges. Barnett was on parole for a murder conviction from the early 1980's when he committed the federal offenses. Barnett's plea of guilty came during the second day of trial while IRS Special Agent Amy LaCour was testifying about the false income tax returns and W-2 forms found during a search of Barnett's house.

During his plea, Barnett admitted that he had conspired with his co-defendant, Daniel Webb to file false claims for refund with the Internal Revenue Service. Barnett admitted that Webb solicited individuals to provide their names and social security numbers which Barnett used to prepare false Forms W-2 to make it appear the individuals worked for various entities, including Foley's Department Stores and the City of Houston. False income tax returns were also prepared by Barnett. Refunds received from the scheme were split between Barnett, Webb and the unemployed individual who allowed their name and social security number to be used. Barnett's fingerprints and handwriting were found on several of the documents located during searches of Webb's car and Barnett's house, including slips of paper that matched the dollar amounts on the fraudulent W-2's. Barnett and Webb worked together to file at least eighteen fraudulent income tax refund claims totaling $29,905.00. Quick work by the IRS prevented all but approximately $5,000 of the bogus refunds from being issued.

Co-defendant Daniel Webb, age 42, pled guilty previously to one count of conspiracy to file false claims for refund and agreed to cooperate with the United States. Webb testified during the first day of Barnett's trial that Barnett had asked him to participate in the scheme by providing names and social security numbers of individuals who had not worked during the year. Webb also testified that any fraudulent refund received was split 50-50 by Barnett and the unemployed individual with Webb receiving $300.

Barnett and Webb each face a possible sentence of ten years imprisonment, three years supervised release, and a fine of $250,000 for the conspiracy count. Barnett also faces a possible sentence of five years imprisonment, three years supervised release, and a fine of $250,000 for each of the five counts of filing a false claim for refund. The case was investigated by Special Agents of the Internal Revenue Service and was prosecuted by the United States Attorney's Office.

doj_sm.gif (2303 bytes)0101010-barnett