Tax Return Preparer Sentenced To Federal Prison In Fraud And Identity Theft Scheme
ATLANTA – A federal judge has sentenced Bernando O. Davis to 21 years and seven months in prison for using stolen identities to file false federal income tax returns that claimed millions of dollars in bogus refunds.
“This lengthy prison sentence reflects the serious damage suffered by more than 15,000 victims across the country at the hands of a prolific identity thief and tax cheat,” said United States Attorney Sally Quillian Yates said. “Mr. Davis lied to his victims to steal their personal information, which he then used to file over $19 million in phony tax returns, making this one of the largest stolen identity tax return cases prosecuted in this district. Given the unfortunate popularity of these schemes, the stiff sentences received by these defendants should send a strong message to identity thieves to get out of this business.”
“The IRS is deeply concerned about those individuals who may have been the victims of stolen identity refund fraud,” stated Veronica Hyman-Pillot, IRS Criminal Investigation Special Agent in Charge. “Identifying, investigating and vigorously prosecuting those individuals involved in these tax related identity theft schemes remains a top priority for IRS Criminal Investigation.”
“A large part of the U.S. Postal Inspection Service’s mission is to ensure public trust in the mail. When that trust is challenged, Postal Inspectors will aggressively investigate and remain steadfast in its resolve to seek justice against those who would seek illegal profiting from the U.S. mail.” said George Frazier, Assistant U.S. Postal Inspector in Charge, Atlanta Field Office.
According to United States Attorney Yates, the charges and other information presented in court: From approximately July 2010 to January 2013, Davis operated “Davis Tax Service,” a tax preparation business in Clayton County, Ga. Davis, working with others, including Kevin J. Sonnier of Ellenwood, Ga., and Carla L. Jefferson of Lancaster, Ca., led thousands of victims to believe that they could apply for “government stimulus payments” or “free government money” from the federal government by providing their names and Social Security numbers. Davis and his conspirators used toll-free telephone numbers, web sites, flyers, and radio advertisements to advertise the “stimulus payments” and collected victims’ personal information when they applied for the payments. They also recruited “runners” who promoted the scheme by word of mouth and collected victims’ personal information.
In addition to the “stimulus” charade, Davis and his co-conspirators acquired names from a variety of sources, including prisons and homeless shelters, to use in the fraud. Many victims testified that they had never heard about the “stimulus payments,” but their identities were nonetheless used by Davis and his co-conspirators to file bogus tax returns.
In actuality, no stimulus program existed, and Davis and his co-conspirators instead used the victims’ personal information to file fraudulent tax returns that claimed a total of over $19 million in bogus refunds. On the returns, Davis claimed false income amounts and student credits to generate the bogus tax refunds. In many of the returns, Davis directed the IRS to pay the refund amounts to bank accounts controlled by him or his co-conspirators. The victims did not know that Davis had filed tax returns in their names. The scheme affected over 15,000 victims in virtually every state across the country.
The evidence at trial showed that Davis had over 1,600 tax refund checks sent to his home address in Stockbridge, Ga., by listing his home address as the victims’ address on the tax returns he filed in their names. In addition to the checks, Davis received thousands of letters addressed to the victims from the IRS, Social Security Administration, and other government agencies. After seeing such a large number of Treasury checks coming to Davis’ home address, a mail carrier seized over 1,000 of these checks and provided them to law enforcement.
Federal agencies executed a search warrant at Davis’ and Sonnier’s business location in February 2013. There they found numerous lists of names, Social Security numbers, and birth dates of victims which were used to file tax returns. They also found tax forms with victims’ signatures taped onto the forms to make it look like the victims had authorized the tax returns. In reality, Davis and his co-conspirators had cut the signatures from the “stimulus” applications and taped them to the tax forms to make their business appear legitimate if anyone asked any questions. When agents first entered the business to execute the search, Davis fled out of the back of the building and was arrested with the assistance of Clayton County law enforcement.
Davis also faxed a fraudulent Georgia driver’s license and tax forms to a Texas detective in 2012, when the detective asked questions about a tax return Davis had fraudulently filed in a Texas victim’s name. Davis falsely represented that the license had been given to him by the taxpayer. Numerous text messages were also introduced at trial where co-conspirators sent Davis names and Social Security numbers, including from prisoners, for use in the scheme.
Davis, 28, of Stockbridge, Ga., was sentenced by United States District Judge Charles A. Pannell, Jr. to 21 years and seven months in federal prison and three years of supervised release, and ordered to pay $7 million in restitution. On December 12, 2013, a jury convicted Davis of one count of conspiracy, 15 counts of wire fraud, and 15 counts of aggravated identity theft. Over 20 victims testified at trial. Davis was detained after the verdict.
On January 9, 2014, Sonnier, 45, of Ellenwood, Ga. was sentenced to eight years in prison and three years of supervised release, and ordered to pay $7 million in restitution. The Court also ordered Sonnier to forfeit his interest in 17 separate pieces of real estate located throughout Clayton County, thousands of dollars that were previously seized from his bank accounts, and over 80 electronic devices and items of jewelry that were previously seized by the government. Sonnier pleaded guilty on May 22, 2013, to conspiracy, wire fraud, and aggravated identity theft.
On November 20, 2013, Jefferson, 48, pleaded guilty to conspiracy for her role in the scheme. Her sentencing is scheduled for March 19, 2014, before Judge Pannell.
This case was investigated by Special Agents of the Internal Revenue Service Criminal Investigation and Postal Inspectors with the United States Postal Inspection Service. If you believe you may be a victim of tax return-related identity theft, please contact the IRS Identity Protection Specialized Unit at 800-908-4490, extension 245 (Mon. - Fri., 7 a.m. - 7 p.m. local time).
Assistant United States Attorneys Stephen H. McClain and Thomas J. Krepp are prosecuting the case.
For further information please contact the U.S. Attorney’s Public Information Office at USAGAN.PressEmails@usdoj.gov or (404) 581-6016. The Internet address for the HomePage for the U.S. Attorney’s Office for the Northern District of Georgia is www.justice.gov/usao/gan.