North Carolina Owner of Tax Preparation Business Sentenced to More than Ten Years in Prison for Conspiracy to Defraud the IRS
Caused Loss of More Than $10.6 Million
A North Carolina man, who owned a tax preparation business in Rockingham, North Carolina, was sentenced to serve 11 years in prison today for conspiring to defraud the Internal Revenue Service (IRS) and assisting in the preparation of fraudulent tax returns, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Sandra J. Hairston for the Middle District of North Carolina.
According to documents filed with the court, from at least January 2012 through April 2016, Herbert Lee Martin of Rockingham, North Carolina, owned and operated a tax preparation business known as “Herb’s Helping Hands,” where he prepared and filed federal income tax returns that fraudulently claimed refunds for clients. Martin also taught others how to prepare false returns and supervised their preparation of these returns. Martin and his co-conspirators reported fictitious or inflated income and dependency exemptions to generate false or inflated Earned Income Tax Credits, false business income and losses, and false deductions. On occasion, Martin and his co-conspirators purchased, and sometimes stole, personal identifying information of individuals, including minor children, and listed these individuals as false dependents on returns to generate larger fraudulent refunds for their clients. Martin would on occasion, direct some of the clients’ refunds into his own bank account or a bank account he controlled.
“Herbert Martin used his business – Herbs Helping Hands – to literally help himself to false and fraudulent deductions and tax credits, which he then sprinkled on his clients’ returns even though he knew they were not eligible to claim them,” said Acting Deputy Assistant Attorney General Goldberg. “The bogus returns his business created caused more than $10.6 million in losses for the U.S. Treasury. Martin’s 11-year sentence is a stern warning to those engaged in preparing fraudulent tax returns that they will be identified and held fully accountable for their criminal conduct.”
“Martin constructed an elaborate scheme to defraud the federal government that resulted in the loss of millions of dollars in tax revenue,” said Acting U.S. Attorney Hairston. “With the sentence that was imposed today, Martin has been brought to justice for his crimes.”
“Today’s substantial sentence for Herbert Martin for preparing and filing false tax returns is a triumph for all honest return preparers,” said Chief Richard Weber of IRS Criminal Investigations (CI). “The only “Helping Hands’ Herb offered were to himself and his co-conspirators by stealing from U.S. Treasury and the wallets of decent taxpayers. Let this be a reminder to others seeking to enrich themselves illegally—IRS CI Special Agents and their law enforcement partners will find you; we will uncover your fraudulent schemes.”
In addition to the term of prison imposed, Martin was ordered to serve three years of supervised release and to pay $10,605,420 in restitution to the IRS.
On May 9, Martin’s niece, Jessica Shanice Taylor, was sentenced to serve 24 months in prison for aggravated identity theft, which she committed as part of Martin’s scheme. She also was ordered to pay $36,569 in restitution to the IRS.
Acting Deputy Assistant Attorney General Goldberg and Acting U.S. Attorney Hairston thanked special agents of IRS–CI, who conducted the investigation, and Trial Attorney Kathryn A. Kimball of the Tax Division and Assistant U.S. Attorney Clifton Barrett of the Middle District of North Carolina, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.