RALEIGH – The United States Attorney’s Office announced that in Federal court on Monday, May 9, 2016, Senior United States District Judge W. Earl Britt sentenced SherrY D. WILLIAMS, 43, of Greenville, North Carolina to 75 months imprisonment, 3 years of supervised release, and ordered to pay $1,050,976 in restitution. Her co-defendant, THADDEUS L. WILLIAMS, 28, of Durham, North Carolina, and the son of SHERRY D. WILLIAMS, was sentenced to 33 months imprisonment, 3 years of supervised release, and and ordered to pay $60,007 in restitution.
SHERRY D. WILLIAMS and THADDEUS L. WILLIAMS were named in a 38-count Indictment filed in the Eastern District of North Carolina on May 20, 2015. On November 2, 2015, the WILLIAMS’ entered separate guilty pleas to making and presenting false tax refund claims to the Internal Revenue Service (“IRS”), in violation of 18 U.S.C. § 287. SHERRY D. WILLIAMS also pleaded guilty to the additional charge of aggravated identity theft, in violation of 18 U.S.C. § 1028A.
According to the charging instrument, other court filings, and the sentencing proceedings, SHERRY D. WILLIAMS worked from approximately May, 2012, to January, 2013, as a manager and tax return preparer at the Farmville, North Carolina, office of Hill’s Tax Service (HTS), a now-defunct, fraudulent tax return preparation business that maintained various offices throughout the Eastern District of North Carolina from 2009 through 2013. HTS was owned and operated by Larry D. Hill, SHERRY D. WILLIAMS’ cousin. Hill was separately charged and convicted of Federal tax crimes relating to his involvement with HTS. On February 4, 2014, Senior United States District Judge W. Earl Britt sentenced Hill to 100 months imprisonment, among other terms of the judgment.
Between approximately May, 2012, and October, 2012, SHERRY D. WILLIAMS organized, deployed, and managed a scheme at HTS’s Farmville office involving the systematic preparation and filing of nearly 400 false Federal income tax returns for tax year 2011. The personal identifiying information (“PII”) used on the fraudulent returns, including names and Social Security numbers, was provided by individuals who were falsely told they could receive “federal program money,” a “stimulus check,” or similar government funds if they had been unemployed and had not filed a tax return for a certain time period. Many of the individuals lured by the scheme were older, unemployed, and receiving disability income. The individuals were told to contact SHERRY D. WILLIAMS, who would determine their “eligibility” for the sham program. If the individual “qualified,” he/she was directed to fax their PII to SHERRY D. WILLIAMS. In turn, SHERRY D. WILLIAMS, aided and assisted by others, prepared and filed false 2011 Forms 1040 in the names of the individuals who had provided their PII. Each fraudulent refund check that resulted from the scheme was typically in excess of $4,000. A small fraction of the refund (e.g., $400-$500) would be wired the individual whose PII was used on the offending return. The remainder of the refund proceeds were distributed among SHERRY D. WILLIAMS and her co-conspirators. According to the investigation, the individuals were never told that a Federal income tax return would be filed in their name, or that the $400-$500 payment they received was, in fact, the proceeds of fraudulent refund checks worth thousands more.
In December, 2012, while still working at HTS, SHERRY D. WILLIAMS, took steps to form her own fraudulent return mill in downtown Tarboro, North Carolina – Best Choice Financial Services (“Best Choice”). By February, 2013, SHERRY D. WILLIAMS had left HTS and was exclusively operating Best Choice with her son, THADDEUS L. WILLIAMS. From that date until approximately July, 2013, SHERRY D. WILLIAMS and THADDEUS L. WILLIAMS prepared and electronically filed nearly 200 false Federal income tax returns for tax year 2012 through Best Choice. The returns reported false household help or “HSH” income and other materially false items. Many of the taxpayers named on the returns included individuals whose PII had been used on returns previously filed by SHERRY D. WILLIAMS at HTS in connection with the “federal program money” scheme.
The investigation of this case was conducted by the Internal Revenue Service-Criminal Investigation. Assistant United States Attorney Adam F. Hulbig prosecuted the case for the government.