Two Kentucky Women Sentenced to Prison for Tax Refund Fraud Conspiracy
Two Kentucky residents were sentenced to prison today after pleading guilty in January to conspiring to defraud the United States with respect to claims, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Kerry B. Harvey of the Eastern District of Kentucky.
Patsy Carnes and Diana Hill were sentenced to 22 and 16 months in prison, respectively. According to court documents, during the years 2011 and 2012, Hill and Carnes worked at the Bailey Switch Pawn Shop in Knox County, Kentucky. There, they conspired with Billy Ray Hamilton and Brian Hamilton, to submit false federal tax returns, sometimes intentionally using personal identifying information without the permission of the named taxpayer.
To advance the conspiracy, Hill and Carnes received and collected taxpayer information, including personal identifying information and provided that information to Billy Ray Hamilton and Brian Hamilton for use in the preparation of false tax returns. Carnes received the fraudulently obtained tax refunds and opened as the sole signature authority of bank accounts into which she knew that some of the fraudulently obtained tax refunds would be deposited.
In addition to the prison terms, U.S. District Judge Amul R. Thupar of the Eastern District of Kentucky ordered Hill to serve three years of supervised release and pay restitution to the Internal Revenue Service (IRS) in the amount of $226,652.89. Judge Thupar ordered Carnes to serve three yearsof supervised release and pay restitution to the IRS in the amount of $226,652.89.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Harvey commended special agents of IRS–Criminal Investigation, who investigated the case and Assistant U.S. Attorney Neeraj Gupta of the Eastern District of Kentucky and Trial Attorney Abigail Burger Chingos of the Tax Division, who prosecuted the case.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.