Arizona Woman Admits Operating Fraudulent Federal Income Tax Refund Scheme
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that KENYA MALCOLM, 36, of Surprise, Ariz., pleaded guilty today in Bridgeport federal court to operating a fraudulent federal income tax refund scheme.
According to court documents and statements made in court, between November 2012 and May 2013, MALCOLM, Charles Ross, Bernard Brantley and others conspired to file false federal income tax returns in the names of individuals without the individuals’ knowledge. MALCOLM, who operated a business in Arizona called “Biggest Refund Taxes,” held herself out falsely to be a certified public accountant. As part of the scheme, MALCOLM paid Ross, also a resident of Surprise, to recruit individuals to her tax preparation business. Ross subsequently contacted Brantley, a resident of Waterbury, Conn., and offered him a portion of Ross’s recruitment earnings if Brantley would also recruit clients for MALCOLM. Instead of recruiting clients for tax preparation services, Brantley and individuals that Brantley hired recruited victims under false pretenses, telling them that they were eligible for government funding and not telling them that tax returns would be filed in their names. Brantley and his associates then collected victims’ Social Security numbers, dates of birth and other personal information and provided that information to MALCOLM.
MALCOLM and Ross knew that Brantley was recruiting individuals under false pretenses.
MALCOLM used the personal information she was provided, as well as false income and employment information for each victim, to file tax returns that generated large tax refunds. She then directed a portion of the tax refunds to herself, a portion to Ross and Brantley, and a portion to the victim, usually through a prepaid debit card.
Approximately $2.5 million in fraudulent federal income tax refunds were sought through this scheme, and more than $1 million in refunds were disbursed.
MALCOLM pleaded guilty to one count of conspiracy, which carries a maximum term of imprisonment of five years. She is scheduled to be sentenced by U.S. District Judge Jeffrey Alker Meyer on June 4, 2015.
Ross and Brantley have also pleaded guilty and are scheduled to be sentenced on May 12, 2015.
This matter is being investigated by the Internal Revenue Service – Criminal Investigation Division and the United States Postal Inspection Service, and is being prosecuted by Assistant U.S. Attorney Sarala V. Nagala and Senior Litigation Counsel Richard J. Schechter.
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