Prison inmate sentenced to 9 additional years in prison for filing false tax refund claims and aggravated identity theft

Anchorage, Alaska – U.S. Attorney Karen L. Loeffler announced today that John Richard Koesterman, 49, currently an inmate in Federal prison, was sentenced to an additional 9 years in prison on December 27, 2013.  Koesterman is serving a 15-year sentence on a federal drug conspiracy conviction, and today received an additional 9-year sentence, 84 months for conspiracy to defraud the government with respect to claims and mail fraud, and a consecutive sentence of 24 months for aggravated identity theft, to be followed by three years’ supervised release.  After Koesterman completes the 15-year sentence, he will begin to serve the 9-year sentence imposed today.  Koesterman pled guilty on September 16, 2013.  In addition to his prison sentence, Koesterman was ordered to forfeit $19,538.75 which was seized by law enforcement, and to pay restitution in the amount of $95,568.

According to filings with the court, while Koesterman was a State of Alaska inmate, he directed others in a conspiracy to defraud the United States by filing false tax returns in order to obtain fraudulent tax refunds.  Between July 2009 and May 2011, Koesterman and his co-conspirators prepared and submitted approximately 55 false tax returns claiming refunds of over $275,000.  Koesterman and his co-conspirators illegally obtained over $95,000 in fraudulent refund claims paid by the United States Treasury. 

Court documents revealed that Koesterman obtained the names and social security numbers of individuals, many of whom were inmates with Koesterman.  Koesterman then used that information to prepare and file false individual income tax returns.  Koesterman also provided that information to other co-conspirators to prepare and file false tax returns.  Most of the false tax returns claimed exemptions for dependents who were not known to or supported by the individual whose name and social security number was used for the false tax return.  Koesterman authorized the co-conspirators to retain a portion of the money from the refunds, and directed them to mail portions of the refunds to other co-conspirators to hold the money for him. 

In sentencing the defendant, United States District Court Judge Timothy M. Burgess stated that “taxpayers have to foot the bill for making good on the loss.” 

“John Koesterman and his conspirators unlawfully manipulated the tax code for their own personal gain, reaping thousands of dollars in fraudulently procured tax refunds,” said Teri Alexander, Special Agent in Charge of Internal Revenue Service Criminal Investigations in the Pacific Northwest. “Today’s sentences signal that IRS Criminal Investigations will bring to justice those who abuse the tax system and attempt to swindle the honest tax paying public.”

s. Loeffler commends the Internal Revenue Service Criminal Investigations for conducting the investigation leading to the successful prosecution of Koesterman.