Two Conspirators Sentenced for Claiming Over $5.5 Million in False Tax Refunds
Greenbelt, Maryland - U.S. District Judge Deborah K. Chasanow sentenced Thomas Arrona Johnson, age 56, of Burtonsville, Maryland, and Harry James Williams, age 46, of Clarksburg, Maryland, to five years in prison and six years in prison, respectively, followed by three years of supervised release for conspiring to defraud the United States and making false claims for tax refunds. Judge Chasanow also entered an order of restitution to the IRS of $992,835.68 and an order of restitution to individual victims of $139,234.50. Williams was sentenced in absentia after he failed to appear in court, and Judge Chasanow issued a warrant for his arrest.
The sentences were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Acting Assistant Attorney General John DiCicco of the Department of Justice, Tax Division; and Special Agent in Charge Rebecca Sparkman of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office.
According to testimony at their one week trial, throughout 2008 and 2009, Johnson and Williams filed and caused others to file with the IRS false individual and trust tax returns that claimed refunds to which the taxpayers named on the return were not entitled. The trial evidence showed that the returns falsely reported certain federal taxes had been withheld, which increased the amount of taxes purportedly paid to the IRS and the size of the refund that could be sought. Based on the false returns, the U.S. Treasury paid over $1 million in fraudulently claimed refunds.
Witnesses further testified that Johnson and Williams also claimed to clients that they could reduce or eliminate their debt, including mortgage, credit card and other debt. The evidence showed that Williams and Johnson would prepare amended individual income tax returns that falsely reported that income tax had been withheld in amounts that substantially exceeded the amount of tax paid. On that basis, the returns claimed tax refunds, the amount of which approximated the debt to be eliminated. The defendants charged fees which ranged up to tens of thousands of dollars per claim, to prepare the false forms.
The evidence presented at trial showed that the defendants filed and caused others to file more than a dozen tax returns that reported $7 million in phony withholding taxes and claimed $5.5 million in fraudulent tax refunds.
United States Attorney Rod J. Rosenstein and Acting Assistant Attorney General John DiCicco commended the IRS-CI for its investigative work and thanked Assistant United States Attorney Michael Pauzé and Trial Attorney Jessica Nuzzelillo of the Department of Justice Tax Division, who prosecuted the case.