Former Piedmont Jail Supervisor Sentenced For Conspiracy, False Tax Returns, And Bank Fraud

            RICHMOND, Va. – William A. Coles, Jr., of Pamplin, Va., was sentenced today to 50 months in prison, 2 years of supervised release, and ordered to pay $1,035,014 in restitution for his role in a conspiracy to defraud the United States through the preparation and filing of false federal income tax returns and bank fraud.

Dana J. Boente, United States Attorney for the Eastern District of Virginia; Mark R. Herring, Attorney General of Virginia; Ron Cimino, Deputy Assistant Attorney General for Criminal Matters, Tax Division; and Thomas J. Kelly, Special Agent in Charge, IRS Criminal Investigation, Washington D.C. Field Office, announced the sentence that was imposed by District Court Judge Henry E. Hudson.

Coles was indicted on seven counts by a federal grand jury on March 4, 2014.  The indictment alleged that Coles conspired with his wife, Sybil Coles, from January 2008 until March 2012 to prepare and file fraudulent federal income tax returns for themselves and several other individuals. The indictment also charged William Coles with five counts of assisting in the preparation of fraudulent federal income tax returns and one count of bank fraud.

A jury convicted Coles on all counts on May 22, 2014.  Evidence at trial established that Coles, a supervisor at the Piedmont Regional Jail, solicited colleagues at the Jail to have their federal income tax returns prepared by his wife.  Several of those co-workers testified that Coles claimed his wife knew of secret law enforcement loopholes to get larger tax refunds.  Believing these tax return strategies were legal, the co-workers provided Coles with their tax documents and fees for the preparation of their returns.  Unbeknownst to those colleagues, however, these returns were fraudulently prepared.

The evidence at trial also showed that William and Sybil Coles electronically deposited checks generated from these fraudulent federal and State of Virginia returns into student bank accounts in the name of their college-age daughter.  The Coles spent this money on personal living expenses, including mortgage and car loan payments and family vacations.  In addition, William Coles was interviewed by Special Agents with the Internal Revenue Service Criminal Investigation and failed to disclose the use of the multiple bank accounts where tax refunds and cash were deposited, but admitted that he knew his wife was filing false tax returns and that he had solicited clients from the Jail.

In addition, the trial evidence included multiple sworn claims by William Coles of inflated income and corroborating false documents, including false W-2s and paystubs for him and his wife, that were submitted to the Bank of America and finance companies to obtain a home refinance loan and two car loans.

Sybil Coles pled guilty on January 28, 2014, to a criminal information charging her with aiding and assisting in the preparation of false tax returns and with aggravated identity theft.  Judge Hudson sentenced her on May 12, 2014 to five years’ imprisonment.

The case is being prosecuted by Department of Justice, Tax Division Trial Attorney and Special Assistant United States Attorney, Rebecca Perlmutter, and Assistant Attorney General and Special Assistant United States Attorney Michael Jagels.  IRS-Criminal Investigation in Richmond, Virginia investigated the case.