East St. Louis and Shiloh Tax Service Operator Sentenced in a $1.6 Million Fraudulent Refund Scheme
Carey E. Herron, 39, of St. Peters, Mo., was sentenced in federal district court for Conspiracy to Defraud the IRS by Submitting False Tax Returns to Make False Claims for Tax Refunds, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today. Herron received a sentence of 46 months imprisonment and three years’ supervised release. He was additionally ordered to cooperate with the Internal Revenue Service in the assessment and collection of income taxes and prohibited from being in the tax preparation service business in the future.
Facts revealed in Court showed that from at least 2009, through April, 2011, Herron, with another individual, d/b/a Prime Time Tax Services, participated in a tax preparation scheme to obtain and help others obtain payment of refunds for false claims to the IRS which they knew they were not entitled. As part of the conspiracy, they created false Schedule C information to falsely inflate the amount of federal fax refund that taxpayers were entitled to receive. When certain individuals would receive their refund, they would be escorted to a check cashing business by a representative of Prime Time Tax Services to cash the refund check and pay the representative an extra fee of generally $500 cash. Herron was not authorized to e-file tax returns and used another tax preparer’s electronic identification number to file the false returns. The total refunds paid out by the Internal Revenue Service for all of the tax returns prepared by Prime Time Tax Services was approximately $2.5 million. Of those total refunds, the Internal Revenue Service paid out approximately $1.6 million in federal tax refunds for Prime Time Tax Service prepared returns that declared Schedule C selfemployment income.
The investigation was handled by the Internal Revenue Service, Criminal Investigations. The prosecution is being handled by Assistant United States Attorney Norman Smith.
If you suspect or know of an individual or company that is not complying with the tax laws, you may report this activity by contacting the local Internal Revenue Service/Criminal Investigation Office at (618) 622-2160 or by mailing information to: Internal Revenue Service, Fresno, CA 93888.