ARKANSAS MAN PLEADS GUILTY TO CLAIMING FRAUDULENT TAX REFUNDS
Philip Butcher pleaded guilty today to filing a false claim for a tax refund before U.S. District Judge Patricia Seitz in Miami, Florida, the Justice Department and the Internal Revenue Service (IRS) announced.
Butcher, formerly a resident of Rogers, Arkansas, admitted that he filed a false 2008 individual income tax return which sought a fraudulent tax refund of $672,781. According to court documents, PMDD Services LLC, an Idaho-based tax preparation firm, prepared the return and filed false IRS Forms 1099-OID with the IRS on Butcher's behalf. In exchange, Butcher agreed to pay 10% of any fraudulent tax refund he received to PMDD Services. Butcher received a fraudulent tax refund of $672,781, paid $67,278 to the principals of PMDD Services, and then filed an amended 2008 individual income tax return, also prepared by PMDD Services, claiming a fraudulent tax refund of $1,456,696.
Butcher faces a maximum potential sentence of 5 years imprisonment and a $250,000 fine, plus restitution to the Internal Revenue Service.
The indictment against Butcher was originally returned by a grand jury in the Western District of Arkansas. Butcher elected to transfer the case to the Southern District of Florida for his guilty plea and sentencing under Federal Rule of Criminal Procedure 20, which allows a defendant, with the consent of the government, to transfer a case to the district where he is "present" if he states in writing that he intends to plead guilty and be sentenced in that district.
More information about fraud schemes involving IRS Forms 1099-OID is available at the IRS website: http://www.irs.gov/newsroom/article/0,,id=98129,00.html.
The case was investigated by special agents of IRS-Criminal Investigation and is being prosecuted by Trial Attorneys Jonathan Marx and Jed Silversmith of the Justice Department's Tax Division and by Assistant United States Attorney Bertha Mitrani of the Southern District of Florida.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.