Tax On The Run Owners And Others Plead Guilty In Tax Refund Scheme Involving Misuse Of First-Time Home Buyer Tax Credit
Impoverished Taxpayers Were Recruited to
Allow Their Names and SSNs to be Used in Filing Fraudulent Returns
DALLAS — Four defendants, whose trial was to begin this Monday on charges related to a tax refund conspiracy they were involved in regarding the misuse of the First-Time Home Buyer Tax Credit, pleaded guilty this afternoon before U.S. District Judge Jorge A. Solis. The four have been on bond since their arrest in January 2012 by special agents with Internal Revenue Service (IRS) – Criminal Investigation. Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
Jason Phread Altman, Emanuel James Harrison and Fread Jamille Jenkins each pleaded guilty to one count of conspiracy to file false claims, which carries a maximum statutory penalty of 10 years in federal prison. However, according to the plea agreements filed today, the parties agree that 84 months is the appropriate custody disposition of each case. If the Court accepts the plea agreements, this provision is binding upon the Court.
Also today, Jarrod Phread Altman pleaded guilty to one count of false, fictitious or fraudulent claims. He faces a maximum statutory penalty of five years in federal prison. The two other defendants charged in the case, Rickel Shine and Billy Hamilton, each pleaded guilty, in May 2012 and February 2013, respectively, to one count of conspiracy to file false claims.
Each count of conviction also carries up to a $250,000 fine and restitution. In addition, according to administrative forfeiture settlement agreements filed, Jason and Jarrod Altman must forfeit two luxury vehicles that were seized by the government.
According to the factual resumes filed in the case, Jason and Jarrod Altman, along with Harrison, owned and operated a tax preparation business, Tax On The Run, located in Dallas. Jenkins worked as office manager for the business, while Shine and Hamilton worked as intermediaries and recruited clients on behalf of the owners.
Beginning in March 2009, Jason and Jarrod Altman, Jenkins, Harrison, Shine and Hamilton conspired to defraud the IRS, according to the factual resumes filed in the case. They used Tax On The Run to file false Forms 1040, in the names of numerous clients, which overstated and fabricated income and tax deductions on Schedule C and Forms 5405 by falsely representing that the taxpayers were entitled, under the provisions of the Housing and Economic Recovery Act of 2008, to claim a tax credit as a first-time homebuyer. As part of the scheme, according to factual resumes filed in their cases, Shine and Hamilton acted as intermediaries to recruit clients, and they were paid after they recruited impoverished taxpayers to allow their names and social security numbers to be used to file fraudulent tax returns. The fraudulent returns were routinely filed even though the tax preparers never met the taxpayers and with the full knowledge that none of the taxpayers qualified to claim the credit, according to the factual resumes.
Tax On The Run used Santa Barbara Bank and Trust (SBBT) to process refund anticipation loans based on the fraudulent returns filed. The factual resumes filed further state that after electronically filing the false tax returns, Tax On The Run would be notified by SBBT that the loan had been approved and a check could be printed and provided to the taxpayer. Once the check was printed, the taxpayer was transported to a local check cashing business and instructed to cash the refund check. After it was cashed, members of the conspiracy paid the taxpayer a small percentage of the refund and kept the remainder of the proceeds, according to the factual resume.
Defendant Jarrod Altman admitted, according to the factual resume filed in his case, that during tax year 2009, he failed to report approximately $71,133 in taxable income which was obtained from his business, Tax On The Run. Of that amount, Jarrod Altman admitted that he received $54,140 in the form of a payment by check by his brother, Jason Altman, for a 2007 Mercedes Benz S550, which was purchased in June 2009, for Jarrod Altman’s use, with money from Tax On The Run. He further admitted that he falsely reported $57,207 in taxable income for tax year 2009 that did not include the $71,133 income described above, and as a result of his false statements regarding his taxable income, Jarrod Altman caused $20,135 in tax harm to the IRS.
IRS-CI investigated the case. Assistant U.S. Attorneys J. Nicholas Bunch, Brian Poe and Rick Calvert are prosecuting