March 17, 2003

PRESS RELEASE

DORCHESTER MAN SENTENCED TO FEDERAL PRISON
FOR TAX REFUND SCAM

Boston, MA... A Dorchester man was sentenced Friday, March 15, 2003, to 40 months in federal prison for his role in leading 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; and Joseph A. Galasso, Special Agent in Charge of the U.S. Internal Revenue Service, Criminal Investigation, announced that JOHN SEIGLER, age 40, whose last known address was 67 Elm Hill Avenue, Dorchester, Massachusetts, was sentenced by U.S. District Judge Patti B. Saris to serve 3 years and 4 months in prison, to be followed by 3 years of supervised release. SEIGLER was also ordered to pay restitution to the U.S. Treasury in the amount of $192,016. SEIGLER pleaded guilty in November of 2002 to all charges in a forty-count indictment charging him with conspiracy to submit false claims for refunds, thirty-eight counts of filing false claims for income tax refunds, and one count of conspiracy to obstruct justice.

At the sentencing hearing, the Court agreed with the Government that the amount of false claims that SEIGLER and his co-defendant, David Reason, claimed by filing false and fraudulent tax returns for refunds was in excess of $1 million. Beginning in 1997, SEIGLER conspired with Reason and others 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 SEIGLER, 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.

SEIGLER was arrested in May of 2002, in Minneapolis, Minnesota, where he had been living with a girlfriend. While being held in a local county jail awaiting transfer to Massachusetts, SEIGLER conspired with his girlfriend to have her destroy incriminating items of evidence against him, specifically a notebook containing lists of names and social security numbers, and a CD Rom containing files related to his tax preparation activities. At SEIGLER's urging, the girlfriend did in fact destroy these items. SEIGLER's sentence was enhanced based on his obstruction of justice.

For his role in the scheme, David Reason, age 41, of 104 Monte Bello Road, Jamaica Plain, Massachusetts, pleaded guilty on September 26, 2002 to conspiracy to submit false claims and nineteen counts of filing false claims for income tax refunds. Reason is scheduled to be sentenced by Judge Saris on March 25, 2003.

The case was investigated by Special Agents of the U.S. Internal Revenue Service, Criminal Investigation. It is being prosecuted by Scott Lawson, Trial Attorney assigned to the DOJ Tax Division.

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