September 1, 2004

Leura Garrett Canary, United States Attorney for the Middle District of Alabama, announced that on August 31, 2004, Erma Weaver Lawrence, also known as Erma Woods, age 50, of Tuskegee, Alabama, pled guilty and was sentenced in United States District Court to four felony charges and one misdemeanor charge relating to her preparation of false tax returns, forgery of two rapid refund checks, misuse of a tax client's social security number to apply for a credit card, and fraudulent claim for a tax refund. Ms. Lawrence submitted her claim for a false tax refund during proceedings on the other charges in this case at a time when she was on pretrial release. Her conduct led to the revocation of her pretrial release.

Title 26, United States Code, Section 7206(2) makes it unlawful for anyone to willfully aid and assist in the preparation of a tax return that is false in any material respect. Title 18, United States Code, Section 513, forbids the creation or passing of forged checks. Title 26, United States Code, Section 7216(a)(2), makes it a crime for a tax preparer to misuse any of the private information she receives from her tax clients. Title 18, United States Code, Section 287, makes it a federal felony for anyone to knowingly present a false claim to the United States Government.

In her plea agreement, Ms. Lawrence admitted that she knowingly and willfully prepared sixteen (16) fraudulent returns for clients of her tax business, Qwik Tax. Specifically, Ms. Lawrence admitted to preparing returns claiming false dependents, bogus deductions, nonexistent income, and incorrect taxpayer statuses. Ms. Lawrence also admitted in her plea agreement that she forged two checks from the Santa Barbara Bank & Trust, and that she misused a client's social security number to apply for an American Express credit card. She also admitted that, while she was on pretrial release on the other charges in this case, she submitted a personal income tax return that contained a false dependent.

Ms. Lawrence's guilty plea was followed immediately by her sentencing hearing. Chief United States District Judge Mark E. Fuller sentenced Ms. Lawrence to a thirty-seven (37) month term of imprisonment followed by a three (3) year term of supervised release. Ms. Lawrence was ordered to pay $67,695.03 in restitution to her victims, including $42,047.03 to the Internal Revenue Service and $25,648.00 to the Alabama Exchange Bank in Tuskegee, Alabama.

United States Attorney Canary stated: "Ms. Lawrence's sentence should stand as a sobering warning to any tax preparer who is considering filing a false return with the Internal Revenue Service. The lesson to be learned is clear: Tax fraud will be discovered and prosecuted, and it will cost far more than it will ever yield. Additionally, tax preparers are now on notice that, if they misuse their clients' social security numbers or private information, they will face the stiff penalties of federal prosecution."

The case against Ms. Lawrence was investigated and successfully resolved thanks to the hard work of agents from the Internal Revenue Service, Criminal Investigations Division, and the Department of Treasury Inspector General for Tax Administration. The case was prosecuted by Assistant United States Attorney Matthew S. Miner.