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Peoria Man Arrested, Charged with Defrauding IRS, Clients

March 3, 2010

Peoria, Ill. – A Peoria man, Roderick Smith, 33, was arrested this morning and appeared before U.S. Magistrate Judge John A. Gorman today on federal charges that he allegedly filed and claimed false tax credits on clients’ income tax returns. Trial in the case has been scheduled for May 10, 2010, before U.S. District Judge Michael M. Mihm. Following today’s hearing, Smith was released with conditions, including that he neither prepare tax returns nor represent himself as an attorney.

On Feb. 24, the grand jury returned a nine-count indictment charging Smith with three counts of wire fraud, two counts of mail fraud, and four counts of making a false claim. The indictment had remained sealed pending Smith’s arrest.

The indictment alleges that as part of the scheme, Smith, of the 600 block of NE Rock Island, in Peoria, falsely represented himself to clients as an attorney, and as President and CEO of Roderick E. Smith & Associates, Inc., Tax and Legal Consultant. According to the indictment, beginning in 2008, Smith allegedly prepared income tax returns for clients which falsely claimed that clients were entitled to the First Time Homebuyers Tax Credit and other deductions and credits. Smith allegedly filed the false tax returns electronically and caused Refund Anticipation Loans to be issued for the tax refunds. According to the indictment, the funds were deposited electronically into an account held in another individual’s name and controlled by Smith.

According to the indictment, Smith allegedly falsely represented to his clients the amount of their respective tax refund, an amount less than that which had been issued. Smith allegedly provided a check for the lesser amount to the client, and kept the excess for himself and on some occasions, kept the entire refund. As a result of the scheme, Smith allegedly falsely claimed over $100,000 in tax refunds.

If convicted, each count of wire and mail fraud carries a penalty of up to 30 years in prison and fines of up to $1,000,000. Each count of making a false claim carries a statutory penalty of up to five years in prison and fines of up to $250,000.

Members of the public are reminded that an indictment is merely an accusation; the defendant is presumed innocent unless proven guilty.

The charges are the result of an investigation by the Criminal Investigation Division of the Internal Revenue Service. The case is being prosecuted by Assistant U.S. Attorney Darilynn J. Knauss.

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