March 25, 2003

PRESS RELEASE

JAMAICA PLAIN MAN SENTENCED TO FEDERAL PRISON
FOR TAX REFUND SCAM

Boston, MA... A Jamaica Plain man was sentenced today in federal prison for his role in a scheme to file false income tax refund claims in the names of welfare mothers to unlawfully collect refund checks.

United States Attorney Michael J. Sullivan; Assistant Attorney General Eileen J. O'Connor of the Department of Justice's Tax Division; Joseph A. Galasso, Special Agent in Charge of the U.S. Internal Revenue Service, Criminal Investigation; Kenneth R. Jones, Inspector in Charge of the U.S. Postal Inspection Service, Northeast Division; and Kenneth Rideout, Chief of the Massachusetts Department of Revenue, Criminal Investigation Bureau, announced that U.S. District Judge Patti B. Saris sentenced DAVID REASON, age 41, of 104 Monte Bello Road, Jamaica Plain, Massachusetts, to 12 months in prison, to be followed by 2 years of supervised release. REASON was also ordered to pay restitution to the U.S. Treasury in the amount of $14,997. REASON pleaded guilty in September of 2002, to conspiracy to submit false income tax returns for refunds, and 19 counts of filing false claims for income tax refunds.

At the sentencing hearing, the Court found that the amount of false claims that REASON and his co-defendant, John Seigler, claimed by filing false and fraudulent tax returns for refunds was $620,266. Beginning in 1997, REASON conspired with Seigler in a scheme in which Seigler directed REASON and others to solicit welfare recipients in the Dorchester, Roxbury, and Mattapan neighborhoods of Boston for their social security numbers and those of their children.

The people providing this information were told that their identities would be used to apply to a government program that would provide them $200 for one child and $500 for two. In reality, the "program" was a false refund scam in which Seigler and REASON prepared and submitted hundreds of false federal and state income tax returns for tax years 1996-1998 using the names and social security numbers of the welfare recipients and listing phony businesses and income for them. Seigler and REASON directed the refund checks for the phony filings to Post Office Boxes in Mattapan owned by Seigler and REASON. Numerous returns were also filed using REASON's home address in Jamaica Plain.

In sentencing REASON, Judge Saris noted that the welfare recipients in whose names these crimes were committed also suffered, as their public assistance was frequently interrupted due to the fraudulent tax return filed in their name, showing that they were working, when in reality, they were not. Additionally, when some of the welfare mothers began working and filed true returns, their federal income tax refunds were withheld by the IRS due to the prior fraudulent returns having been submitted in their names by Seigler and REASON.

Seigler previously pleaded guilty for his role in the scheme and was sentenced by Judge Saris on March 14, 2003, to 3 years and 4 months of imprisonment. Seigler was also ordered to pay restitution in the amount of $192,016 to the U.S. Treasury.

The case was investigated by Special Agents of the U.S. Internal Revenue Service, Criminal Investigation, the U.S. Postal Inspection Service, and the Massachusetts Department of Revenue, Criminal Investigation Bureau. It was prosecuted by Scott Lawson, Trial Attorney assigned to the DOJ Tax Division.

Press Contact: Samantha Martin, (617) 748-3139