Part Owner of Tax Preparation Business Admits to Preparing False Tax Returns and Aggravated Identity Theft
Obtained Over $1 Million in Fraudulent Refunds
Baltimore, Maryland - Tyrone Robert Campbell, a/k/a “Mr. Muhammad,” “Muhammad Shahid,” and “Tyrone Moore,” age 42, of Baltimore, pleaded guilty today to conspiracy to file false tax returns, to aiding and assisting in the preparation of false tax returns and aggravated identity theft.
The plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Rebecca Sparkman of the Internal Revenue Service - Criminal Investigation; and Special Agent in Charge Richard A. McFeely of the Federal Bureau of Investigation.
“While most tax return preparers provide excellent service to their clients, a few unscrupulous tax preparers file false and fraudulent returns to defraud the government, the tax-paying public and their own clients,” stated Rebecca Sparkman, Internal Revenue Service-Criminal Investigation Special Agent in Charge, Washington DC Field Office. “Tax refunds should only be issued to taxpayers who are entitled to them.”
According to his plea agreement, Campbell and his wife, Twanna Dorothea 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, Campbell 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.
As part of his plea agreement, Campbell agrees to the entry of a restitution order of at least $1 million, the amount of loss sustained by the IRS as a result of this scheme.
Twanna Dorothea Campbell, aka “Twanna D. Gaines,” “ Twanna Campbell-Moore,” and “Mrs. T,” age 32, of Baltimore, pleaded guilty to her role in the scheme and is scheduled to be sentenced on April 13, 2011 at 9:30 a.m.
Tyrone Campbell faces a maximum sentence of five years in prison for conspiracy; a maximum of three years in prison for each count of assisting in the preparation of false tax returns; and a mandatory sentence of two years in prison, consecutive to any other sentence, for aggravated identity theft. U.S. District Judge William M. Nickerson scheduled sentencing for May 17, 2011, at 9:45a.m.
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 are prosecuting the case.