Conspirator Sentenced to 33 Months in Prison in Scheme to File False Claims Seeking over $4 Million in Fuel Tax Credit Refunds

July 7, 2009

Greenbelt, Maryland - U.S. District Judge Roger W. Titus sentenced William Smith, age 34, of Forestville, Maryland, today to 33 months in prison followed by three years of supervised release for mail fraud and filing a false claim in connection with a scheme to obtain fraudulent tax refunds from the IRS, announced United States Attorney for the District of Maryland Rod J. Rosenstein. Judge Titus also ordered Smith to pay restitution of $769,078.

According to the plea agreements of the conspirators, between 2004 and July 2008, Smith and several co-conspirators filed 154 fraudulent corporate tax returns for tax years 2003 through 2007, asserting that he or corporations purportedly owned by Smith or his co-conspirators had paid taxes on fuel that was used for non-taxable purposes, entitling them to obtain refunds. The returns claimed fuel tax credit refunds totaling $4,063,763 and the IRS issued refund checks totaling $1,648,335 in response to some of the claims and rejected other claims. In fact, at no time did Smith or any corporation owned by him or his co-conspirators purchase the fuel on which the tax refunds were claimed, nor were they entitled to any of the refunds.

Specifically, Smith filed or caused to be filed 35 tax returns claiming fuel tax credit refunds totaling $2,409,354. The IRS issued refund checks totaling $1,201,732 in response to some of the claims. Smith also provided assistance to his co-conspirators by recruiting them into the scheme and providing them with tax documents to support the fraudulent claims.

“At the IRS, protecting taxpayer money is a matter we take extremely seriously. An integral part of the agency’s mission involves detecting and catching fraudulent tax refund claims,” stated C. Andre' Martin, Internal Revenue Service-Criminal Investigation Special Agent in Charge. "The IRS-Criminal Investigation is determined to stop these false tax refund schemes."

Judge Titus previously sentenced co-conspirators: Telemaga Bamba, age 44, of Bowie, Maryland, to 70 months in prison, and ordered Bamba to forfeit two Mercedes-Benz vehicles and a Harley-Davidson motorcycle, and to pay restitution of $928,649; Mr. June Leftwich, age 34, formerly of Forestville, Maryland to 55 months in prison and ordered Leftwich to pay restitution of $2,404,087; Dorian Holmes, age 28, also formerly of Forestville, to two months in prison and ordered her to pay restitution of $499,364; and Soumahoro Ben Amara, age 46, of Silver Spring, Maryland to 33 months in prison for fraud and identity theft.

In a related case, on January 16, 2009, Judge Titus sentenced James Hallmon, age 44, of Fort Washington, Maryland, to 21 months in prison for filing federal corporate tax returns in which he fraudulently claimed $647,060 in fuel tax credits.

United States Attorney Rod J. Rosenstein thanked the Internal Revenue Service - Criminal Investigation for its investigative work. Mr. Rosenstein commended Assistant United States Attorneys Jonathan Su and Gina L. Simms, who prosecuted the case.



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