STRATFORD MAN CHARGED WITH TAX REFUND SCHEME
David B. Fein, United States Attorney for the District of Connecticut, announced that BENJAMIN GREEN, III, 44, of Stratford, was arrested today for allegedly engaging in a tax scheme that caused the Internal Revenue Service to erroneously issue him a tax refund of more than $600,000.
On September 6, 2012, a federal grand jury sitting in New Haven returned an indictment charging GREEN with one count of making a false claim against the United States and one count of attempting to obstruct the administration of the internal revenue laws. The indictment was unsealed following GREEN’s arrest.
According to the indictment, in March 2009, GREEN filed an Individual Income Tax Return for the 2008 tax year. In the tax return, GREEN asserted the “Original Issue Discount” (“OID”) tax scheme, in which taxpayers fraudulently claim significant amounts of OID interest income and federal tax withholding on their federal tax returns. The object of the OID tax scheme is to obtain large tax refunds from the U.S. Treasury by fraudulently claiming significant federal tax withholdings that exceed the smaller amount of tax due on the falsely claimed income.
The indictment alleges that GREEN falsely claimed to have received $920,063 in taxable interest income, and to have $929,702 of federal income tax withholdings for the 2008 tax year. Based on this false information, GREEN claimed a refund from the IRS in the amount of $616,434. In March 2009, the IRS wired $616,434 to three bank accounts designated by GREEN. When the IRS tried to collect the erroneously issued refund, GREEN undertook a course of conduct to inhibit the IRS’s efforts to recover the money, including sending frivolous correspondence to the IRS, hiding real property in the name of a nominee entity to impede the IRS’s collection efforts, and falsely complaining that the IRS had commenced unauthorized collection and enforcement actions against him.
The indictment further alleges that GREEN, who has not returned any of the erroneously-issued funds, used the majority of the funds to pay off his mortgage.
Following his arrest, GREEN appeared before United States Magistrate Judge Holly B. Fitzsimmons in Bridgeport. GREEN is currently detained.
The charge of making a false claim against the United States carries a maximum term of imprisonment of five years, and the charge of attempting to obstruct the administration of the internal revenue law carries a maximum term of imprisonment of three years.
U.S. Attorney Fein stressed that an indictment is not evidence of guilt. Charges are only allegations, and each defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This matter is being investigated by the Internal Revenue Service – Criminal Investigation. The case is being prosecuted by Special Assistant United States Attorney Sean Beaty and Assistant United States Attorney Susan L. Wines.
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