Local businesses owner and employee each plead guilty to filing false tax returns after failing to report nearly $4 million in income
ATLANTA - Tamar Lee has been sentenced for conspiring to present false claims for refunds to the Internal Revenue Service.
“The defendants stole the personal identifying information of innocent victims, netting more than $1 million in fraudulent refunds,” said U.S. Attorney Kurt R. Erskine. “As we approach tax season, it is important to protect personal information from thieves who use it to further schemes like the one in this case.”
“Lee and her co-conspirators demonstrated a blatant disregard for the integrity of the United States tax system and caused immeasurable hardship to innocent victims, said James E. Dorsey, Special Agent in Charge, IRS, Criminal Investigation, Atlanta Field Office. “Let the sentencing today be a warning to individuals who dare to commit identity theft and refund fraud of this magnitude. They will be punished to the fullest extent of the law. IRS Criminal Investigation remains committed to pursuing identity theft and refund fraud with our partners at the U.S. Attorney’s Office.”
According to U.S. Attorney Erskine, the charges and other information presented in court: Tamar Lee and co-conspirator Don Terry obtained names and personal identifying information for individuals, without their knowledge and consent. Many of the victims lived outside of Georgia, with some residing in shelters or prison at the time the tax returns were filed.
Lee and Terry provided the victims’ information to a now deceased co-conspirator, a local tax return preparer with her own tax preparation business. The fraudulent Form 1040 U.S. Individual Income Tax Returns were prepared and electronically filed from the co-conspirator’s business. The tax returns included false Forms W-2 listing employers for whom the victims did not work. They also claimed refunds based on false claims of federal income tax withholdings never paid to IRS.
The same tax preparer also used a refund transfer service, Refund Advantage, which allowed the co-conspirator to print refund checks at her place of business. When the IRS paid refunds, the tax preparer accordingly printed the checks and gave them to Terry and Lee who then deposited them into bank accounts Lee opened and controlled. Lee paid the co-conspirators a portion of these proceeds.
Lee also used one of her existing companies to file fraudulent Form 1120 U.S. Corporate Income Tax Returns that falsely claimed refunds based on bogus fuel tax credits. This credit allowed companies to offset their tax liability based on certain fuel expenses incurred throughout the year. Lee’s company, however, never incurred such expenses, and therefore did not qualify for the credit. IRS subsequently paid one of the requested refunds by depositing the funds into Lee’s bank account.
Lee, Terry, and co-conspirator Jeffrey Smith were also part of a scheme to submit fraudulent corporate income tax returns that made false claims for refunds. They provided to the deceased tax preparer information for other existing companies, and for companies they created for this scheme, that was used in the preparation and filing of fraudulent Form 1120 U.S. Corporate Income Tax Returns. These returns all falsely claimed refunds based on fuel tax credits to which the companies were not entitled. IRS paid some of the requested refunds by mailing treasury checks to addresses provided by Lee, Terry, and Smith.
Overall, the tax fraud scheme resulted in false claims for refunds in excess of $2 million over a three-and-a-half-year period. IRS consequently paid more than $1 million in refunds for fraudulently filed corporate and individual income tax returns.
Tamar Lee, 53, of Smyrna, Georgia, was sentenced to four years, three months in prison to be followed by three years of supervised release and ordered to pay restitution in the amount of $306,316.22. Lee was found guilty by a jury on November 4, 2021.
The following also have been sentenced for their role in the tax fraud scheme:
This case was investigated by the Internal Revenue Service Criminal Investigation.
Assistant U.S. Attorneys Tracia King and Brian Pearce prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at USAGAN.PressEmails@usdoj.gov or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.