Former IRS Worker, Two Others Convicted Of Tax Refund Scheme
PHILADELPHIA - Former Internal Revenue Service employee Patricia Fountain, 35, Larry Ishmael, 40, and Calvin Johnson, Jr., 35, all of Philadelphia, PA, were found guilty yesterday of committing a series of tax refund schemes that defrauded the U.S. Government. A federal jury found each of the three defendants guilty of multiple counts of both conspiracy and filing false claims/tax returns to the IRS. For abusing her public office, Fountain was also found guilty of extortion. Johnson, Jr. was also found guilty of filing false claims while he was on pretrial release. Collectively, the defendants’ schemes cost the IRS well over $1 million.
Each of the defendants solicited claimants whose personal information the defendants used to file false tax returns claiming the Telephone Excise Tax Refund (TETR) in 2007 and the First Time Homebuyer Credit in 2009. Fountain also claimed the TETR by filing false tax returns for herself and for Ishmael, and used one of the claimant’s information to file a false tax return in 2008. Johnson, Jr. also used claimants’ information to file false tax returns in 2012, while he was being supervised on pretrial release in this case.
For each of the schemes, which Fountain engineered using inside information from the IRS, the defendants charged claimants a cash fee. With respect to her TETR scheme, Fountain warned that she would “red flag” those claimants who did not pay her a $400 fee. She then filed amended returns for those whom she believed had not paid the fee, causing the IRS to demand payment from certain claimants who had previously received TETRs. Fountain and Ishmael pooled their cash fees for their mutual use, including an $11,299 down payment on a Mercedes Benz R350, which Fountain structured by paying $9,900 in cash and charging the rest to a credit card.
Sentencing hearings for the defendants are scheduled for Fountain and Ishmael for June 17, 2013. Johnson’s sentencing hearing is scheduled for June 18, 2013. Pending sentencing, Ishmael and Johnson are being detained in federal custody and Fountain is being supervised on home detention. Fountain faces an expected advisory sentencing guideline range of 188 to 235 months in prison; Ishmael faces an expected advisory sentencing guideline range of 78 to 97 months; Johnson, Jr., faces an expected advisory sentencing guideline range of 108 to 135 months in prison. The defendants could also be ordered to pay restitution to the IRS, and fines, in addition to the mandatory special assessments. Co-defendants Andre Bruce, Howard Chilsom, William Martin, and Calvin Johnson, Sr. previously pleaded guilty.
The case was investigated by the Treasury Inspector General for Tax Administration and IRS Criminal Investigation. It is being prosecuted by Assistant United States Attorney Joe Khan and Department of Justice, Tax Division Trial Attorney Tiwana L. Wright.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525