Two Maryland Men Sentenced on Federal Charges for Roles in Massive Identity Theft and Tax Fraud Scheme
Worked With Others to Seek More Than $700,000 in Fraudulent Refunds
Two Maryland residents were sentenced today for their involvement in a far-reaching stolen identity refund fraud scheme in which they worked with others to seek over $700,000 in income tax refunds through the filing of fraudulent federal income tax returns, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division, U.S. Attorney Channing D. Phillips of the District of Columbia, Special Agent in Charge Thomas Jankowski of the Internal Revenue Service-Criminal Investigation (IRS-CI), Inspector in Charge Terrence P. Mckeown of the U.S. Postal Inspection Service, Washington Division and Assistant Inspector General for Investigations John L. Phillips of the U.S. Department of the Treasury.
Wayne Gardner, 50, of Capitol Heights, Maryland, and Michael Whittaker, 32, of Cumberland, Maryland, are among approximately 20 participants in this scheme who have pleaded guilty to charges in the U.S. District Court for the District of Columbia. According to court documents, the overall case involves the filing of at least 12,000 fraudulent federal income tax returns that sought refunds of at least $42 million. The two men pleaded guilty on Jan. 20, to one count each of conspiracy to commit theft of public money and theft of public money.
U.S. District Judge Ellen S. Huvelle for the District of Columbia sentenced Gardner to serve 16 months in prison, 200 hours of community service and ordered him to pay $158,160 in restitution to the IRS, and sentenced Whittaker to serve 18 months in prison and ordered him to pay $397,090.95 in restitution to the IRS. The restitution ordered represents the value of the U.S. Treasury checks that were negotiated as a result of their conduct. Following their prison terms, the men will be placed on three years of supervised release.
According to the government’s evidence, Gardner and Whittaker participated in a massive and sophisticated stolen identity refund fraud scheme that involved an extensive network of more than 130 people, many of whom were receiving public assistance. The refunds were sought for tax years 2005 through 2012, often in the names of people whose identities had been stolen, including the elderly, people in assisted living facilities, drug addicts and incarcerated prisoners. Returns were also filed in the names of, and refunds were issued to, people who were willing participants in the scheme. The refunds listed more than 400 “taxpayer” addresses located in the District of Columbia, Maryland and Virginia.
According to documents filed with the court, Gardner and Whittaker obtained the means of identification of third parties, including names and social security numbers and provided them to a co-conspirator for use in the preparation of fraudulent income tax returns. Whittaker admitted to providing 21 means of identification from August 2010 to May 2012. He also permitted various residential addresses that he controlled to be used as purported taxpayer addresses for the delivery of tax refund checks and deposited U.S. Treasury checks that were received as part of this scheme into his bank accounts. Gardner admitted to providing 65 means of identification to a co-conspirator between August and December 2010, and his involvement in the filing of 116 fraudulent tax returns that sought refunds of approximately $299,984. Whittaker admitted that he was involved in the filing of 135 fraudulent tax returns that sought refunds of approximately $494,902.
The fraudulent tax returns that were filed as part of the scheme included Schedules C or C-EZ that falsely claimed that each “taxpayer” operated a business, such as “barber” or “childcare,” as a sole proprietorship. The returns falsely stated that the “taxpayer” had gross receipts and two or more dependent children, when, in fact, the “taxpayer” was either a victim of identity theft, was misled into providing his or her identifying information, or was a willing participant in the scheme.
Two other defendants recently were sentenced for their roles in the conspiracy:
Bernard Rankin, 44, of Glenarden, Maryland, was sentenced to serve 15 months in prison and ordered to perform 100 hours of community service and pay $190,487 in restitution. He pleaded guilty on Nov. 4, 2015, to conspiracy to defraud the United States with respect to claims. Rankin admitted permitting the use of his residential address and bank account in the scheme and recruiting another individual to take part as well.
Lakisha Jackson, 40, of District Heights, Maryland, was sentenced to serve six months in a halfway house and ordered to perform 100 hours of community service and pay $175,953 in restitution. She pleaded guilty on May 3, to one count of conspiracy to commit theft of public money. Jackson admitted that she allowed her residential address to be used in the scheme.
In announcing the sentences, Principal Deputy Assistant Attorney General Ciraolo, U.S. Attorney Phillips, Special Agent in Charge Jankowski, Inspector in Charge Mckeown and Assistant Inspector General Phillips commended those who investigated the case. They also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office of the District of Columbia, including former Assistant U.S. Attorney Sherri L. Schornstein and Paralegal Specialists Donna Galindo, Julie Dailey, and Jessica Mundi. Finally, they expressed appreciation for the work of Assistant U.S. Attorney Ellen Chubin Epstein of the District of Columbia’s Fraud and Public Corruption Section and Trial Attorneys Jeffrey B. Bender and Thomas F. Koelbl and former Trial Attorney Jessica Moran of the Tax Division, who prosecuted the case.