Grand Bay Man Convicted Of Bankruptcy Fraud, False Tax Return Preparation Scheme Charges
United States Attorney Kenyen Brown announces that Gerrode Smith of Grand Bay, Alabama today pled guilty to charges of bankruptcy fraud, conspiracy to defraud the United States and preparing and filing false tax returns. Artemius Smith, of Saint Elmo, Alabama, who is Gerrode Smith’s cousin, pled guilty to Federal tax conspiracy charges.
The charges concern the filing of false tax returns through Smith’s Tax Service, a business jointly owned by Gerrode and Artemius Smith. The Smiths prepared and electronically filed tax returns which claimed the First Time Home Buyer’s Credit where the named taxpayer had not purchased a home in the year claimed, and tax returns which fraudulently claimed the Earned Income Credit and other credits.
Gerrode Smith falsely answered questions about his bank accounts and business interests in his bankruptcy Schedules and Statement of Financial Affairs, which concealed the business and bank accounts from the bankruptcy court, the Trustee and creditors.
The statutory maximum penalty for each of the violations is five years imprisonment, plus a fine of not more than $250,000.
The case was investigated by agents of the Mobile office of Criminal Investigation, Internal Revenue Service. United States Attorney Kenyen R. Brown stated that the prosecution shows that the Department of Justice understands its duty to work to ensure that honest taxpayers are not taken advantage of, and to protect taxpayers from those who claim to be bona fide tax return preparers, but in reality prepare and file fraudulent returns. IRS Special Agent in Charge Rodney E. Clarke stated: “Taxpayers need to be cautious about selecting a return preparer because it is the taxpayers that are ultimately responsible for paying back any fraudulent refunds, along with interest and penalties.
The case is being prosecuted by Assistant U.S. Attorneys Charles Baer and Gregory Bordenkircher on behalf of the United States Attorney’s Office for the Southern District of Alabama.
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