Operator Of O.I.D. Process, $228 Million Fraudulent Tax Refund Scheme, Pleads Guilty
SAN FRANCISCO, Calif. – Duffy R. Dashner (a/k/a Kevin Dashner), pleaded guilty to one count of conspiracy to submit false claims United States Attorney Melinda Haag, Acting Assistant Attorney General for the Tax Division Caroline D. Ciraolo, and Internal Revenue Service, Criminal Investigation, Special Agent in Charge Jose M. Martinez, announced.
According to the plea agreement, Dashner, 42, of Reseda, Calif., and his co-conspirators, including Mark R. Maness, operated a business called O.I.D. Process through which they helped others to prepare and file individual federal income tax returns that claimed false Original Issue Discount (OID) interest income and federal tax withholdings, resulting in fraudulent claims for tax refunds (OID returns). Dashner and Maness charged clients of O.I.D. Process a non-refundable registration fee to join the organization, and a 20 percent “refund acquisition fee” for any refund check issued by the Internal Revenue Service (IRS). Dashner and Maness also operated a website and conducted weekly conference calls with clients to promote their business and to assist clients in preparing and filing OID returns.
Dashner and Maness required clients of O.I.D. Process to change their mailing address with the IRS to the address of another co-conspirator who was an attorney in San Francisco. As a result, all correspondence from the IRS to the clients, and the clients’ O.I.D. refund checks, were sent to the attorney’s address rather than the clients’ home address. In this way, Dashner and Maness ensured they would receive a 20 percent refund acquisition fee. O.I.D. Process clients filed approximately 200 O.I.D. returns claiming refunds that totaled approximately $228 million.
Dashner was charged by indictment with one count of conspiracy to submit false claims, in violation of Title 18, U.S.C. § 286, and two counts of aiding and assisting in the presentation of a false income tax return, in violation of Title 26, U.S.C. § 7206(2). Dashner pleaded guilty to one count of conspiracy to submit false claims, in violation of 18 U.S.C § 286. Dashner’s sentencing hearing is scheduled for October 2, 2015 at 11:00 a.m., before the Honorable Susan Illston, United States District Judge, in San Francisco. The maximum statutory penalty for the conspiracy to submit false claims, in violation of 18 U.S.C § 286 is 10 years in prison, and a $250,000 fine, although any sentence would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553. Maness previously pleaded guilty to conspiracy to submit false claims against the United States and was sentenced in February 2015 to serve 41 months in prison, and ordered to pay $1,176,668 in restitution to the IRS.
United States Department of Justice Tax Division Trial Attorney Matthew J. Kluge and Assistant United States Attorney Michael G. Pitman are prosecuting this case. The prosecution is the result of an investigation by IRS-CI.