philadelphia man pleads guilty to tax fraud scheme
Colin Williams, 32, of Philadelphia, pleaded guilty today to his role in a tax fraud scheme that fraudulently sought refunds in the amount of approximately $868,907. Williams was charged with conspiracy and fraud in connection with the same tax refund scheme that is alleged in an indictment against Benjamin Johnson, 48, of Philadelphia. Williams and Johnson operated Marshall Street Financial Services (“MSFS”), a tax preparation services business located at 974 N. Marshall Street in Philadelphia. Johnson will be arraigned Friday.
The Indictment alleges that between December 2008 and April 2009, Johnson and Williams conspired to obtain identification and dependent information to MSFS customers which would enable the customers to obtain what was said to be government refunds or “stimulus payments.” Along with Williams, Johnson allegedly solicited customers who were typically unemployed or low-income earners, sometimes supported primarily by public assistance, to provide their personal identification information, including their dates of birth, Social Security number information, and such information belonging to the customers’ dependents. After obtaining the customer’s personal identification and income information, Williams allegedly sought tax refunds by preparing false federal income tax returns and schedules which contained inflated and false income and Earned Income Tax Credit information.
After early February 2009, Johnson allegedly arranged for the IRS tax refunds to be electronically transferred into his and Williams’ own bank accounts instead of the accounts of MSFS customer/taxpayers, thereby enabling Johnson and Williams to receive the customers’ refunds themselves. The defendants allegedly distributed only a portion of the remittance to the customer. It is further alleged that Johnson caused the filing of tax returns for himself and in the name of an individual, known to the grand jury, unlawfully identifying children who were the dependents of another MSFS employee and of MSFS customers. Between January 2009 and April 2009, Johnson and Williams allegedly sought refunds, by falsifying returns, in the amount of approximately $868,907.
At sentencing on September 11, 2013, Williams faces a maximum possible sentence of 15 years in prison, three years of supervised release, a fine of up to $500,000, and a $200 special assessment. If convicted of all charges, Johnson faces a maximum possible sentence of 50 years in prison, three years of supervised release, a fine of up to $2.25 million, and a $900 special assessment. Upon conviction, both defendants may be ordered to pay restitution to the IRS.
The case was investigated by the Internal Revenue Service Criminal Investigations and is being prosecuted by Assistant United States Attorney James R. Pavlock.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
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