David E. Nahmias, United States Attorney for the Northern District of Georgia, and James Vickery, Special Agent in Charge, Internal Revenue Service, Criminal Investigation Division announce that BEN NYEMAH BADIO, a/k/a “Kawi Badio,” 46, of Norcross, Georgia, was sentenced today for operating a $1.5 million tax fraud scheme. According to Nahmias and the documents and evidence at today’s sentencing hearing:

BADIO was sentenced to 6 years, 6 months in federal prison, ordered to serve 5 years of supervised release, ordered to pay over $400,000 in restitution to the IRS, and ordered to pay his interest in a 2002 Cadillac Escalade, which was the subject of a $55,000 money laundering violation, forfeited to the United States. He pleaded guilty on April 18, 2005, to one count of criminal conspiracy, nine counts of filing false claims with the IRS, nine counts of bank fraud, and three counts of money laundering.

BADIO’s brother, ELROY BADIO, 35, of Marietta, Georgia, who had also pleaded guilty to assisting in the conspiracy, was sentenced to six months of home confinement to be followed by six months of probation, and ordered to pay over $20,000 in restitution. ELROY BADIO received a reduction in his sentence based on his cooperation with the Government in this case.

BEN BADIO, is a former tax preparer who operated in Gwinnett County, Georgia, in 2000 and 2001. According to the evidence, BEN BADIO electronically filed over 80 false tax returns in 2000 and 2001, and without the knowledge of his clients falsely claimed inflated refunds in their name in excess of $1,500,000. ELROY BADIO assisted his brother in the scheme and was found liable for false returns in excess of $200,000

BEN BADIO and in some cases ELROY BADIO filled out tax forms claiming that each of these taxpayer-clients was entitled to thousands of dollars in a “Federal Fuel Tax Credit,” based on purported purchases by the taxpayer of tens of thousands of gallons of diesel, kerosene, liquid petroleum gas, and other fuel. The returns prepared by BEN BADIO also represented that the taxpayer used this fuel for one or more of the limited specified uses that give rise to the Fuel Tax Credit, such as farming, off-road business use, and propulsion of commercial buses and trains. In fact, the taxpayers never made such fuel purchases, never engaged in those activities, and never told BEN BADIO or his accomplice otherwise.

BEN BADIO caused the refunds to be sent to himself, through bank accounts that he controlled, by way of “refund anticipation” bank loans BADIO applied for in the names of the taxpayers. In some cases BADIO then paid the taxpayer-client a purported refund, but it was just a fraction of what he had actually claimed and received in their name. In the remaining cases BADIO sent the taxpayer-client no refund at all. BADIO concealed from his taxpayer-clients the lies he put on their returns. BEN BADIO claimed over $1,500,000, and actually received over $400,000 before his scheme was detected and shut down.

BEN BADIO also conducted three transactions that constituted the additional crime of money laundering. Specifically, he purchased a $55,000 Cadillac Escalade, a $50,000 Mercedes, and made a $50,000 investment in a local restaurant, all with the proceeds of his fraud.

United States Attorney David E. Nahmias said, “Today’s sentences reflect the seriousness with which our office, the IRS, and the courts take frauds involving the nation’s tax system. Most taxpayers and their preparers are honest and lawful, but a few tax preparers make their living on victimizing the taxpayers generally and their clients specifically. Those fraudsters face federal prosecution and prison time.”

The case was investigated by Special Agents of the IRS, Criminal Investigation Division, with assistance from Special Agents of the U.S. Social Security Administration, Office of Inspector General.
Assistant United States Attorneys Justin S. Anand, Richard M. Langway, and Phyllis B. Sumner prosecuted the case.
IRS Special Agent in Charge James Vickery reminds taxpayers that they are responsible for the accuracy of all entries made on their tax returns, which include related schedules, forms and supporting documentation. This remains true whether the return is prepared by the taxpayer or by a return preparer. The IRS Criminal Investigation Division suggests the following helpful hints for choosing a Return Preparer to ensure you don't hire an Abusive Return Preparer:

• Avoid return preparers who claim they can obtain larger refunds than other preparers.
• Avoid preparers who base their fee on a percentage of the amount of the refund.
• Use a reputable tax professional that signs your tax return and provides you with a copy for your records.
• Consider whether the tax professional offers electronic filing options and other payment options that you want.
• Consider whether the individual or firm will be around to answer questions about the preparation of your tax return, months, even years, after the return has been filed.
• Never sign a blank tax form.
• Ask questions. Do you know anyone who has used the tax professional? Were they satisfied with the service they received?

The IRS advises, “When in doubt, check it out!” Taxpayers hearing claims from preparers offering larger refunds than other preparers are encouraged to check it out with a trusted tax professional or the IRS before getting involved. Vickery reminds citizens that they may consult the IRS website for additional information. For further information please contact David E. Nahmias, United States Attorney or F. Gentry Shelnutt, Chief, Criminal Division, through Patrick Crosby, Public Affairs Officer, U.S. Attorney's Office, at (404) 581-6016. The Internet address for the HomePage for the U.S. Attorney's Office for the Northern District of Georgia is www.usdoj.gov/usao/gan.