Participant in Prison Tax Fraud Ring Sentenced to 21 Months in Prison
SACRAMENTO, Calif. — Judy Ruth Mullin, 27, of Nevada City, was sentenced today by U.S. District Judge Garland E. Burrell Jr. to 21 months in prison and ordered to pay $219,984 in restitution for her role in a conspiracy to defraud the United States with false claims for federal tax refunds, Acting U.S. Attorney Phillip A. Talbert announced.
According to court documents, beginning in 2011, Mullin and six co-defendants operated a tax fraud scheme out of the California Correctional Center in Susanville. Four co‑defendants incarcerated at the correctional center obtained personal identification information of other inmates. This information was then provided to Mullin and other co‑defendants located outside the prison, who prepared and filed false income tax returns with the Internal Revenue Service, claiming refunds that they knew to be false and to which the inmates were not entitled. Mullin opened a bank account in which to deposit the fraudulently obtained refunds and transferred the wrongfully obtained refunds to the prison accounts of the incarcerated co-defendants. Mullin also personally received money in return for her participation in the scheme.
In all, the conspiracy resulted in at least 247 false claims for income tax returns in tax years 2008 through 2011. Although the IRS stopped some of these refunds, approximately 138 fraudulent refunds totaling approximately $219,984 were issued.
“Ms. Mullin and her co-defendants attempted to steal hundreds of thousands of dollars from the government by filing income tax returns claiming refunds to which the inmates were not entitled,” said Special Agent in Charge Michael T. Batdorf, IRS Criminal Investigation. “Ms. Mullin then transferred the false refunds to the prison accounts of the incarcerated co-defendants. The object of these schemes is to defraud the government and the American taxpaying public. IRS-CI will continue to identify and investigate those involved in these types of schemes.”
This case is the product of an investigation by the Internal Revenue Service, Criminal Investigation, the Federal Bureau of Investigation, and the Investigative Services Unit at the California Correctional Center. Assistant United States Attorney Amy Schuller Hitchcock is prosecuting the case.
On July 8, 2015, Edwin Ludwig the IV was sentenced to seven years in prison for his role in the scheme. Two other co-defendants have pleaded guilty and are set for sentencing in August 2016. The charges against the remaining three co-defendants are pending. The charges against them are only allegations; they are presumed innocent until and unless proven guilty beyond a reasonable doubt.