IRS Worker Charged In Tax Refund Scheme
PHILADELPHIA - An indictment was unsealed today charging Internal Revenue Service employee Patricia Fountain, 34, and Larry Ishmael, 39, both of Philadelphia, PA, in a tax refund scam that defrauded the U.S. Government. Fountain is charged with conspiracy to file false claims with the United States, filing and aiding and assisting in the filing of fifteen false tax returns, extortion under the Hobbs Act, and structuring financial transactions. Ishmael is charged with conspiracy to file false claims with the United States, and aiding and assisting in the filing of a false tax return. The indictment was announced by United States Attorney Zane David Memeger, Assistant Attorney General of the Justice Department's Tax Division Kathryn M. Keneally, and Acting Special Agent-in-Charge Akeia Conner with the Internal Revenue Service Criminal Investigation Division. The defendants were arrested this morning.
According to the indictment, Fountain solicited taxpayers to file false tax returns claiming the Telephone Excise Tax Refund (TETR). The indictment details 21 separate instances in which Fountain is alleged to have filed false tax returns claiming the TETR, including her own false tax return and Ishmael’s false tax return.
The indictment alleges that Fountain charged the taxpayers $400 to file the return and warned that she would “red flag” those who did not pay her fee. The indictment further alleges that Fountain filed amended returns for certain taxpayers whom she believed had not paid the fee, thus reversing the refunds that were previously issued by the IRS.
Finally, the indictment alleges that the couple shared a residence, money, and assets, including a 2007 Mercedes Benz R350. Fountain is alleged to have structured the down payment of the Mercedes in an attempt to evade the statutory reporting requirements.
If convicted of all charges, Fountain faces a statutory maximum sentence of 106 years in prison and an expected advisory sentencing guideline range of 51 to 63 months or more in prison, a fine of up to $4.5 million, three years supervised release, and a $1,800 special assessment. Ishmael faces a maximum statutory sentence of 13 years in prison, a fine of up to $500,000, three years supervised release and a $200 special assessment.
The case was investigated by the Treasury Inspector General for Tax Administration and IRS Criminal Investigations and is being prosecuted by Assistant United States Attorney Joe Khan and Department of Justice, Tax Division Trial Attorney Tiwana L. Wright.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525