Federal Jury Convicts Hay Springs Couple Of Conspiracy And Filing False Claims Against The United States
United States Attorney Deborah R. Gilg and Stephen Boyd, Special Agent in Charge of IRS Criminal Investigation, St. Louis Field Office, announced that on June 14, 2012, a United States District Court jury in Omaha returned guilty verdicts against David L. Kleensang, age 61, and Bernita M. Kleensang, age 59, of Hay Springs, Nebraska following a two and one half day trial. David Kleensang was convicted of one count of conspiracy to defraud the United States, one count of endeavoring to obstruct the due administration of the Internal Revenue laws, and 13 counts of presenting false claims to the United States. Bernita Kleensang was convicted of one count of conspiracy to defraud the United States and six counts of presenting false claims to the United States.
Evidence presented at the trial showed that the Kleensangs had not filed any tax returns in 2003 through 2006 or in 2008 through 2011. In fact, the evidence showed that the Kleensangs had testified under oath in state court proceedings in Sheridan County, Nebraska, that they did not have to file tax returns because they were not “federal” employees and did not live in the District of Columbia. However, in 2008, a total of 67 returns were filed between them for calendar year 2007, with David Kleensang filing 57 separate returns for himself and Bernita Kleensang filing 10 separate returns on her own behalf. As to the counts in the Indictment, many of the returns sought refunds of $2.5 million dollars or $5 million dollars, while other returns sought refunds in amounts involved in two separate lawsuits which had been filed against the Kleensangs in the District Court of Sheridan County. During the investigation of the case, the Kleensangs had admitted that they had filed the returns to “get justice” for the judgments which had been rendered against them in Sheridan County. The total amount of the refunds claimed for the counts of conviction was $48,453,484.00.
The frivolous nature of the returns was detected through the Frivolous Return Program Unit established by the Internal Revenue Service in approximately 2001. The unit is located in Ogden, Utah. Returns detected by this unit are pulled from processing and the filer is sent a warning letter advising that if the returns are not corrected, the filer could be penalized. Not only did the Kleensangs not correct their returns, they continued to file similar returns seeking refunds for approximately four months after the first letter was sent out.
"The law is crystal clear: people must pay their taxes. There is no gray area on this issue when individuals attempt to evade paying taxes. For decades, the courts have consistently upheld the tax law," said Boyd, “and we appreciate the great teamwork with the U. S. Attorney’s office in obtaining this verdict.”
Sentencing has been set for September 17, 2012 before Chief United States District Court Judge Laurie Smith Camp.