inmate pleads guilty to prison tax fraud scheme
KANSAS CITY, Mo. – David M. Ketchmark, Acting United States Attorney for the Western District of Missouri, announced that a state prison inmate pleaded guilty in federal court today to a tax refund scheme.
Kevin D. Dunham, 45, an inmate at the Western Missouri Correctional Center in Cameron, Mo., pleaded guilty before U.S. District Judge Brian C. Wimes to a charge contained in a Feb. 21, 2012, federal indictment.
By pleading guilty today, Dunham admitted that he prepared false tax returns for inmates in 2008 and 2009 while he was incarcerated at the Farmington Correctional Center in Farmington, Mo., and the Western Missouri Correctional Center.
Dunham obtained inmates’ names and Social Security numbers and created false Form 1040EZs. Dunham also prepared false Form W2s on a typewriter he had in his cell, and filed those false Form W2s along with the false Form 1040EZs, which were handwritten. The returns were mailed to inmates’ families outside the prison, who forwarded them to the IRS. The refund checks were then sent to the inmates’ families, who divided the money between themselves, the inmates, and Dunham.
Dunham received approximately $200 to $300 per return, which was paid to his mother; she then deposited some of the money into his prison account.
The federal indictment sets forth that Dunham filed false tax returns totaling $139,644 in false claims. The IRS actually paid $54,814 in fraudulent refunds.
Under federal statutes, Dunham is subject to a sentence of up to five years in federal prison without parole, plus a fine up to $250,000 and an order of restitution. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Roseann A. Ketchmark. It was investigated by IRS-Criminal Investigation.