Monroeville Resident Who Operated Fradulent Tax Preparation Business Sentenced To Four Years
United States Attorney Kenyen R. Brown of the Southern District of Alabama announced today that Arthur Leyon Penn, 39, of Monroeville, Alabama, was sentenced today by Senior U.S. District Judge Callie V. S. Granade to 48 months of imprisonment for aggravated identity theft in connection with tax fraud. The judge ordered that Penn undergo supervised release upon completing his prison term, face credit restrictions, pay $841,617.05 in restitution, and pay a $200 mandatory special assessment.
Penn led The Penn Agency LLC, a company based in Monroeville, Alabama that provided insurance and fraudulent tax preparation services. He co-owned The Penn Agency with his wife, co-defendant Oleavia Mitchell Penn, who operated another fraudulent tax preparation business, Quick Tax, in Camden, Alabama.
In January 2016, Arthur Penn and five co-defendants were indicted by the Federal Grand Jury for the Southern District of Alabama. The indictment alleged that between 2011 and 2015, Penn orchestrated a fraudulent tax scheme and sought personal financial gain by defrauding the Treasury Department through the preparation and filing of fraudulent federal tax returns. The scheme’s overarching goal was to maximize fraudulent tax refunds. To this end, Arthur Penn used various methods such as listing false dependents on tax returns, unlawfully acquiring individuals’ social security numbers through payments and theft, creating fictitious household business incomes, and fraudulently inflating or decreasing a client’s income or deductions to maximize the Earned Income Tax Credit. These techniques were used at both The Penn Agency and Quick Tax, as Arthur and Oleavia Penn trained employees on how to best prepare fraudulent tax returns. He and his wife charged upfront fees from taxpayer clients for initial meetings. They also generated fees through the use of tax preparation software. The Penns arranged to directly receive federal tax refunds and placed sizeable portions of the refund checks into bank accounts under their control before remitting the balance to their clients. Arthur Penn would sometimes steal money from his tax clients by keeping an extra portion of fraudulent tax refunds that were supposed to go to his clients.
On August 22, 2016, Arthur Penn pled guilty to two counts of aggravated identity theft in connection with the unlawful use of individuals’ social security numbers and the preparation and submission of fraudulent tax returns. That same day, Oleavia Penn also pleaded guilty before Senior Judge Granade to committing aggravated identity theft.
Later in August 2016, Arthur Penn was indicted by the Federal Grand Jury for the Southern District of Alabama on two counts of tampering with a witness in his tax fraud case. On December 14, 2016, before being sentenced in his tax fraud case, Arthur Penn pleaded guilty before Senior Judge Granade to one count of witness tampering. As part of his plea, he admitted to attempting to bribe a former employee at The Penn Agency to prevent her from testifying against him at trial in his tax fraud case.
Arthur Penn’s sentencing date for the witness tampering violation is January 13, 2017. He faces up to twenty years imprisonment for the offense. Oleavia Penn’s sentencing date in the tax fraud case is March 15, 2017.
The tax fraud and witness tampering cases were investigated by the Federal Bureau of Investigation, the Internal Revenue Service, Criminal Investigation, and the 35th Judicial Circuit Task Force in Monroeville, Alabama. The cases were prosecuted by Assistant United States Attorneys Sinan Kalayoglu and Greg Bordenkircher.