For Immediate Release
December 19, 2001
U. S. Attorney Jim Letten and Terry Stuart, Special Agent in Charge of the Internal Revenue Serviceís Criminal Investigation, announced today the sentencing of two individuals, one from Kentwood, LA and the other Fluker, LA.
Henry Carter Smith, Kentwood, LA and Kenneth Ray Lee of Fluker, LA, income tax return preparers, who both pleaded guilty on September 12, 2001 to one count of conspiracy to defraud the United States Government by filing a false claim for refund, were sentenced today by U.S. District Judge Ginger Berrigan. Smith was ordered to serve 10 months incarceration, followed by 5 years probation. Smith was also ordered to pay $22,431 in restitution. Lee was sentenced to 3 years probation and ordered to pay restitution in the amount of $2,751.
According to the Indictment:In 1997, Kenneth Ray Lee and Henry Carter Smith participated in a scheme to obtain payment of false claims for refund from the Internal Revenue Service, by filing in others names, false 1995 and 1996 claims for federal income tax refunds to which they knew they were not entitled. Smith and Lee prepared a number of returns in the names of minor children. They also prepared a number of returns using false dependants. The false dependants were listed as foster children of each taxpayer.
Lee is the cousin of Smith and learned to prepare fraudulent tax returns from Smith around June 1997. Lee maintained post office boxes registered to himself in Fluker, LA (P.O. Box 109 and 207) and Amite, LA (P.O. Box 1191). Lee also received fraudulent refund checks at a post office box registered to his wife in Fluker, LA.(P.O. Box 153).
Smith and Lee used othersí information and social security numbers whenever they prepared false claims. They also, on occasion, encouraged others to obtain a dependantís name and social security number, so their refund would be larger.
Smith and Lee used a series of street addresses and post office boxes in which they had control to ensure that they received the refund checks without the taxpayers knowledge.
Assistant U.S. Attorney Byron Williams prosecuted the case for the government. The investigation was conducted by special agents of the Internal Revenue Serviceís Criminal Investigation.