WASHINGTON - Henderson Joseph, the former owner of Triad Business Services, has pleaded guilty in connection with a massive tax fraud conspiracy in which the tax preparation service he owned fraudulently sought over half a million dollars in tax refunds for clients, announced U.S. Attorney Jeffrey A. Taylor and C. André Martin, Special Agent in Charge, Internal Revenue Service, Criminal Investigation.

Joseph, 54, of Clarksburg, Maryland, pleaded guilty today before the Honorable Richard J. Leon in the U.S. District Court for the District of Columbia to the charge of Conspiracy. The maximum statutory penalty is 5 years of incarceration and a fine of $250,000.00. Under the U.S. Sentencing Guidelines, which are advisory, Joseph faces a prison sentence of 30 to 37 months of incarceration, a fine, an order of restitution, and a 3-year term of supervised release. Sentencing is scheduled for April 15, 2009.

The guilty plea arises in connection with Joseph's role as the former owner of Triad Business Services, a local tax preparation service, which had offices in the District of Columbia, Richmond, Virginia, and Baltimore, Maryland. In April 2006, a federal grand jury returned a nine-count indictment against Joseph, and one of the Triad office managers, Marcelle L. Stephens, for filing fraudulent client tax returns in the tax fraud scheme. Two other office managers, Draphet Moody and Nicole Williams, pleaded guilty and agreed to cooperate with the government prior to Indictment. Stephens pleaded guilty and agreed to cooperate following Indictment.

The guilty plea stems from a massive tax fraud conspiracy, which Joseph masterminded, to obtain fraudulent refunds between 2001 and May 2002 for thousands of clients by falsifying itemized deductions and credits on the clients' U.S. Individual Income Tax Returns, Forms 1040. Joseph and his co-conspirators attempted to impede the functions of the Internal Revenue Service and defraud the IRS by filing false tax returns. The fraudulent income tax returns contained inflated or fabricated itemized deductions such as charitable contributions, job expenses, and other miscellaneous expenses to which the taxpayers were not in fact entitled. False credits were also claimed for education and child care.

Joseph worked out of the D.C. office, which Stephens managed. Joseph and Stephens allegedly instructed the other managers, to inflate or fabricate deductions and credits on the clients tax returns, thereby increasing the refunds the taxpayer/clients would receive, increasing Triad's fees, and increasing repeat customers who would return in successive years. All of the tax returns prepared at the Triad offices were reviewed by Joseph and Stephens and then electronically transmitted to the IRS. The IRS has proceeded civilly against the taxpayers whose returns were falsified, seeking repayment of the unlawful refunds, plus interest, and penalties. The taxpayers who lacked documentation for the previously claimed deductions and credits conceded the IRS' assessed tax liability and have repaid the wrongfully issued tax refunds.

"This case highlights that we will aggressively prosecute and hold accountable those who seek to unlawfully obtain money by manipulating our federal tax system. As we approach another tax filing season, taxpayers are reminded to scrupulously review a tax return prepared by their tax return preparer and question any credit or deduction which they did not in fact incur or for which they lack appropriate documentation," said U.S. Attorney Taylor.

"While most tax return preparers provide excellent service to their clients, a few unscrupulous tax return preparers file false and fraudulent tax returns to defraud the government, the tax paying public, and their own clients," stated IRS Special Agent in Charge Martin. "The Internal Revenue Service urges taxpayers to be wary of schemes that promise to eliminate taxes or otherwise sound too good to be true." For a listing of the IRS's "Dirty Dozen" common schemes, visit:

http://www.irs.gov/newsroom/article/0,,id=180075,00.html

In announcing the guilty plea, U.S. Attorney Taylor and IRS Special Agent in Charge Martin commended the work of IRS Special Agent Charles Jones and the staff of the U.S. Attorney's Office, including Legal Assistant Lisa Robinson and Assistant U.S. Attorney Sherri L. Schornstein, who is prosecuting the matter.