Final Two Defendants In Tax King Case Plead Guilty
Donald S. Boyce, Acting United States Attorney for the Southern District of Illinois, has announced that Edric A. Russell, 35, and Pierre J. Carter, 34, both of East St. Louis, IL, pled guilty yesterday to filing false tax returns. Both Russell and Carter worked at the East St. Louis location of a tax return preparation business known as "Tax King."
Tax King was owned and operated by co-defendant Eyob Tilahun. In addition to the East St. Louis location, Tilahun operated several Tax Kings in St. Louis, Missouri. On May 20, 2016, Tilahun pled guilty to conspiring to submit false claims for tax refunds. Tilahun admitted that Tax King’s return preparers were trained and instructed to increase their customers’ refunds by falsifying certain information on their tax returns. The false information that was placed on the returns included: (1) false Business Income and Schedules Cs which caused the clients to qualify for larger Earned Income Credits ("EICs"); (2) false wages, which again caused the clients to qualify for larger EICs; (3) false education expenses which enabled the clients to qualify for American opportunity education credits; and (4) false information regarding fuel taxes which qualified the clients for federal fuel tax credits.
Tilahun admitted that he profited from the scheme by charging Tax King’s clients fees which ranged from approximately $400 to $650. The indictment in the case alleges that the return preparers also profited by requesting cash "tips" from the clients that ranged from approximately $100 to $1,000.
In their guilty pleas, Russell and Carter both admitted that they prepared false tax returns while working at Tax King. Both admitted that they placed false Schedule C income on their clients’ returns in order to qualify them for higher refunds. Russell also admitted that he placed false education expenses on his client’s return, which also fraudulently increased her refund amount. Both admitted that they requested tips from their customers for preparing the false returns. The charge of preparing a false income tax return carries a maximum sentence of 3 years of imprisonment, a $250,000 fine, and restitution.
In addition to Russell, Carter, and Tilahun, four other defendants in the case have previously pled guilty. Those defendants are: Mason B. Richmond, 31, of St. Louis, MO; Lakesha R. Wilson, 28, of East St. Louis, IL; Tanesa L. Beverly, 32, of East St. Louis, IL, and Melissa L. Wiley, 34, of Granite City. Wilson, Beverly, and Wiley all worked as return preparers at the East St. Louis Tax King. Richmond worked as a return preparer at a Tax King on North Grand in St. Louis.
Tilahun, Beverly, and Wiley are scheduled to be sentenced on September 9, 2016. Sentencing for Wilson and Richmond will be October 7, 2016. Russell and Carter will be sentenced on January 27, 2017.
The investigation is being conducted by agents from both the Fairview Heights, Illinois, and St. Louis, Missouri Offices of the Internal Revenue Service – Criminal Investigation. The case is being prosecuted by Assistant United States Attorney Scott A. Verseman. The United States Attorney’s Office for the Eastern District of Missouri has also prosecuted several return preparers who worked at Tax King locations in St. Louis, MO.