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Springfield Woman Pleads Guilty to False Tax Return Scheme

August 3, 2011

Springfield, Ill. – A Springfield, Ill., woman, Jennifer Marie Muhammad, also known as Jennifer Powers, waived indictment and entered pleas of guilty yesterday to her role in a tax fraud conspiracy scheme that claimed more than $1,000,000 in false tax refunds over three years. According to court documents, Muhammad, 42, of Springfield, appeared before U.S. Magistrate Judge Byron G. Cudmore and pled guilty to one count each of conspiracy to commit fraud and aiding and assisting in the preparation of false and fraudulent tax returns.

During court proceedings and in court documents, Muhammad admitted that in 2005 she became involved in the conspiracy with her now-deceased stepfather. To further the conspiracy, Muhammad admitted that she recruited individuals whose name and social security number were used to prepare false tax returns which falsely claimed earned income credit and that she prepared five to 10 false tax returns. Generally, the earned income credit is available to low income wage-earning or self-employed taxpayers to reduce the amount of tax due; however, if the amount of the credit exceeded the tax due, the taxpayer received the excess as a refund. According to court documents, from March 2005 to April 2008, as a result of the scheme, approximately 435 returns were filed and more than $800,000 in refunds were issued by the IRS.

Sentencing for Muhammad is scheduled on Dec. 5, 2011, before U.S. District Judge Richard Mills. The statutory penalty for conspiracy to commit fraud is up to five years in prison and a fine of up to $250,000; for aiding and assisting in the preparation of false tax returns, the penalty is up to three years in prison and a fine of up to $100,000. The defendant may also be ordered to pay restitution.

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 Gregory K. Harris.

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