Owners of Tax Preparation Business Sentenced to Prison for Preparing False Tax Returns and Aggravated Identity Theft
Obtained Over $1 Million in Fraudulent Refunds
Baltimore, Maryland - U.S. District Judge William M. Nickerson sentenced Tyrone Robert Campbell, a/k/a “Mr. Muhammad,” “Muhammad Shahid,” and “Tyrone Moore,” age 42 of Baltimore, today to five years in prison, followed by three years of supervised release; and his wife, Twanna Dorothea Campbell, aka “Twanna D. Gaines,” “ Twanna Campbell-Moore,” and “Mrs. T,” age 32, also of Baltimore, to a year and a day in prison, followed by three years of supervised release, for conspiracy to file false tax returns and aggravated identity theft. TyroneCampbell was also convicted of aiding and assisting in the preparation of false tax returns. Judge Nickerson also entered and order of restitution against both Campbells, in the amount of $1.25 million.
The sentences were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Acting Special Agent in Charge Jeannine A. Hammett of the Internal Revenue Service - Criminal Investigation; and Special Agent in Charge Richard A. McFeely of the Federal Bureau of Investigation.
"IRS Criminal Investigation has made investigating refund fraud and identity theft a top priority," stated Acting Special Agent in Charge Jeannine A. Hammett,of the Washington DC Field Office. "Filing fraudulent tax returns in the names of other individuals may result in significant harm to those individuals whose identities were stolen, as well as a monetary loss against the U.S. Treasury."
Special Agent in Charge Richard A. McFeely of the FBI said, “The FBI and its law enforcement partners are committed to detecting and investigating identity theft and other financial crimes. But the best protection is prevention. This case reminds us all to be vigilant in protecting our personal financial information, even when dealing with trusted advisors. ”
According to their plea agreements, Tyrone and Twanna Campbell owned a tax preparation business that operated under various names, including Phoenix Tax World, 101 Taxes, 420 Income Tax Services, and 1 One 1 Taxes (collectively, “Phoenix”). Between 2006 and 2009, Phoenix was located in Baltimore at several locations, including 2216 Harford Road, 3349 Greenmount Avenue and 4829 Belair Road.
From approximately late 2005 or early 2006 through at least April 2009, the Campbells prepared over 600 fraudulent individual federal income tax returns on behalf of their clients. The Campbells required each client to fill out a questionnaire requesting that individual’s personal and financial information. After the client left the Phoenix office, the Campbells filled out an electronic tax return in which, without the client’s knowledge, they entered false items to increase the client’s tax refund. For example, the Campbells claimed: exemptions and child tax credits for non-existent dependents; losses from businesses the client did not operate; credits paid for bogus child care expenses; and federal income tax withholdings from unearned wages. Once the client’s tax refund check became available the Campbells required as a cash payment a percentage – generally between 20% and 40% – of the client’s tax refund. In this way, the Campbells’ inflation of their clients’ tax refunds increased the Campbells’ own tax preparation fees.
The Campbells also enrolled many clients in a Refund Anticipation Loan (RAL) program without their knowledge. A RAL is a short-term loan provided by a lender that is based on, and usually repaid by, an anticipated federal income tax refund. A bank funded the client’s RAL and issued the loan in the form of a check made payable to the client. In doing so, the bank deducted its own fees and also deducted an additional tax preparation fee, which it wired directly to a bank account controlled by the Campbells. Thus, the Campbells received an additional tax preparation fee that was not disclosed to their clients. In 2007, the Campbells opened a bank account using the stolen personal identifying information of one of Mrs. Campbell’s former clients to conceal the fact that these additional tax preparation fees were being paid to them. The Campbells wrote checks drawn off that bank account in order to pay for personal and business expenses.
In the course of preparing and presenting materially false tax returns on behalf of his clients, Tyrone Campbell committed several instances of aggravated identity theft. For example, on February 4, 2008, he used the name and social security number of an individual without that individual’s knowledge or permission, listing that person as a dependent on a client’s tax return, in order to increase the client’s tax refund. In fact, the individual was not a dependent of the client. Twanna Campbell maintained a list of names, dates of birth and social security numbers of children which she used to obtain larger tax refunds for her clients by claiming deductions for dependents who were not actually related to her clients. The book was recovered by law enforcement in June 2009 , when law enforcement officers executed a search warrant at the Campbell’s home, along with $96,480 in cash hidden in the home.
United States Attorney Rod J. Rosenstein commended the IRS - Criminal Investigation and the FBI for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Sujit Raman and Martin Clarke, who prosecuted the case.