United States Attorney Jenny A. Durkan
Western District of Washington
Four Indicted For Tax Rebate Scam Involving State Prison Inmates’ Personal Information
Repeat Offender Allegedly Led Scheme to Claim Tax Refunds in Names of State Penitentiary Inmates
Four people are under arrest on an indictment charging them with scheming to fraudulently claim more than $145,000 in tax refunds using the names and Social Security numbers of inmates at the Washington State Penitentiary at Walla Walla, Washington.The alleged leader of the conspiracy, KENNETH RANDLE DOOR, is already under indictment for being a felon in possession of a firearm, being a felon in possession of body armor, and being a felon in possession of an explosive. This separate indictment charges DOOR, 42, as well as LUCY ANNE HYDER, aka Lucy Bailey, 52; RUTH LOUISE BRANSTETTER, aka Ruth Bishop, 47; and RICHARD SHANE WRIGHT, 42, with conspiracy to defraud the government, and eleven counts of filing false claims for tax refunds. Two of the defendants, HYDER and BRANSTETTER, were arrested today and are scheduled to appear in U.S. District Court in Tacoma at 2:30 this afternoon. DOOR and WRIGHT are already in custody on other charges.
According to the indictment, in 2008 and 2009, the defendants conspired to file fake tax returns using the names and Social Security numbers of prison inmates to claim fraudulent refunds. DOOR was incarcerated at the Washington State Penitentiary in Walla Walla. Other conspirators were living in Tacoma and Puyallup. Using the internet the conspirators identified companies that had declared bankruptcy and had recently closed. The conspirators created fake W-2 forms indicating wages paid and taxes withheld from the individuals whose identities they used. Virtually all of these individuals were prison inmates at the time who had not been employed by the now defunct companies. The conspirators filed at least 31 false tax returns, attempting to obtain more than $145,000 in refunds. The conspirators obtained nearly $72,000 in fraudulent tax refunds.
If convicted the defendants face up to 10 years in prison.
The charges contained in the indictment are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.
The case was investigated by Internal Revenue Service Criminal Investigation (IRS-CI). The case is being prosecuted by Assistant United States Attorney Steven Masada.