Washington Woman Sentenced In $2 Million Fraud Scheme
For Immediate Release
U.S. Attorney's Office, District of Alaska
Anchorage, Alaska – U.S. Attorney Karen L. Loeffler announced today that Pepe Anetipa has been sentenced by United States District Court Judge Sharon Gleason to serve 30 months in prison for filing false tax returns that cheated the United States Treasury out of more than $2 million.
Anetipa, originally of American Samoa and now a resident of Washington, previously pled guilty to 28 counts of making false, fictitious, and fraudulent claims against the government. As part of her plea, Anetipa admitted filing false tax returns on behalf of residents of American Samoa claiming thousands of dollars in refunds to which they were not entitled.
Upon being released from prison, Anetipa will be on supervised release for three years. As part of her sentence, she was ordered to pay restitution to the United States Treasury in the amount of $202,859 – the total amount of refunds corresponding to the counts of conviction. The overall amount of money paid out by the Treasury as a result of Anetipa’s scheme, however, was much higher – approximately $2 million. As part of her sentence, Anetipa will also have to complete 40 hours of community service, which Judge Gleason recommended she spend focusing on educating others in American Samoa about the illegality of tax schemes like hers.
According to Assistant U.S. Attorney Stephanie C. Courter, who prosecuted the case, Anetipa’s fraud scheme began in 2010 when she began filing false 2009 tax returns with the Internal Revenue Service (IRS). She filed on behalf of residents of American Samoa, all of whom were not required to file tax returns with the IRS but were instead required to file with the taxing authority in American Samoa. On each return, she falsely claimed that the IRS had withheld federal taxes from her clients and thus were due a refund.
In approximately July 2011, Anetipa moved from American Samoa to Anchorage, Alaska. Once in Alaska, she obtained a State of Alaska business license and opened a tax preparation business –Triple-H Tax and Services. Through her business, Anetipa continued to file false tax returns for residents of American Samoa.
Anetipa’s scheme was multi-faceted, involving much more than simply filling out a Form 1040. Before completing the returns themselves, Anetipa first took information from Forms W-2AS (forms specific to residents of American Samoa) and used it to create false Forms W-2 claiming her clients earned money outside of American Samoa. Anetipa also changed the addresses on the Forms W-2 to either a Texas or an Alaska address instead of addresses in Pago Pago, American Samoa. The altered Forms W-2 gave the tax returns the false appearance that the income was earned in the United States and that Anetipa’s clients had federal tax withholding paid into the tax system. In fact, no one earned any income in the United States, and there had been absolutely no withholding.
After creating the false Forms W-2, Anetipa then transferred the information onto tax returns on which she claimed her clients were owed significant refunds. In order to increase the refunds, Anetipa also encouraged her clients to find dependents to include on their returns. The addition of dependents allowed taxpayers to claim that they were entitled to the Earned Income Tax Credit (EITC) even though they were in fact entitled to $0 from the United States Treasury. According to testimony and evidence received at sentencing, the IRS ultimately linked Anetipa to the preparation and filing of hundreds of false returns that resulted in the payment of approximately $2 million in false refunds. For her efforts, Anetipa was either paid a flat fee of $500 per false return or, later in the scheme, began splitting the refunds between her clients’ bank accounts and her own accounts, sometimes taking thousands of dollars from a single refund.
In sentencing Anetipa, Judge Gleason focused on the seriousness of the offense and the need to promote respect for the law. She also noted the significant amount of money involved – more than $2 million – and found that greed had at some point become a factor in Anetipa continuing her scheme. Judge Gleason rejected Anetipa’s argument that the fact that some of the money went to people in need in American Samoa justified stealing from the Treasury. Ultimately, in announcing the 30-month sentence, Judge Gleason found it important to deter others in the future from committing similar crimes, stating that one way to achieve deterrence is to sentence offenders in a way that sends a message that these types of crimes will not be tolerated.
“By filing these bogus tax returns, Pepe Anetipa effectively stole from each and every honest taxpayer,” stated Special Agent in Charge Teri Alexander of IRS Criminal Investigation. “Tax refund fraud is our top priority. IRS CI is duty bound to track down anyone who prepares or files a false tax return claiming a refund to which they are not due.”
The case was prosecuted by Assistant U.S. Attorneys Stephanie Courter and Thomas Bradley of the U.S. Attorney’s Office for the District of Alaska. The case was investigated by the Internal Revenue Service Criminal Investigation (IRS-CI).
Updated February 4, 2016