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Press Release

Eight Sentenced in Massive Stolen Identity Tax Refund Fraud Scheme

For Immediate Release
U.S. Attorney's Office, Southern District of Texas

HOUSTON – The eight defendants charged in this district in a scheme in which fraudulent tax returns were filed using identification information that was stolen and used without lawful authority have all been ordered to prison, announced U.S. Attorney Kenneth Magidson along with Postal Inspector in Charge Adrian Gonzalez of the U.S. Postal Inspection Service (USPIS) and Special Agent in Charge Rick Goss of IRS-Criminal Investigation (CI).

Travis White, 32, and Jalan Willingham, 35, both of Atlanta, Georgia, were the ring leaders in the conspiracy and both pleaded guilty to conspiracy to commit mail fraud, one count of wire fraud and aggravated identity theft. Shawn Phillip Thornton, 37, also of Atlanta, pleaded guilty to the conspiracy as did postal carriers Edward Dwayne Vallier, 42, of Houston, and Tangela R. Jackson-Lezeau, 36, of Port Saint Lucie, Florida. Another letter carrier - Calvin Shelton, 39, also of Atlanta - entered a guilty plea to the conspiracy as well as mail fraud, seven counts of wire fraud and two counts of aggravated identity theft. Two others - Kerry Lionel Ruffin, 32 and Rance Hunter, 31, both of Atlanta, pleaded guilty to the conspiracy and aggravated identity theft.

U.S. District Judge Keith P. Ellison accepted all the guilty pleas and imposed the sentences today. White and Willingham were ordered to serve 200 and 108 months, respectively, for the conspiracy and wire fraud charges as well as a consecutive 24-month-term of imprisonment on the identity theft which must be served consecutively to the other sentences imposed. Following the total  224 and 132-month-terms, White and Willingham will also serve three years of supervised release.

Shelton was ordered to serve 33 months in prison for the conspiracy and mail fraud charges in addition to a 24-month-term of imprisonment for the identity theft for a total of 57 months in federal prison. Vallier, Thornton and Jackson-Lezeau received respective sentences of 27, 45 and 46 months in prison. Ruffin and Hunter will serve 26 and 60 months, respectively, for the conspiracy convictions which will be served consecutively to another 24 months for the identity theft, resulting in sentences of 50 and 84 months in federal prison. They must all also serve three years of supervised release following their releases from prison.

The court ordered restitution in the total amount of $7,845,652, with the defendants paying varying amounts in accordance with their roles in the scheme.

At the hearing, a victim testified about the effect the defendants’ stealing her identity has had on her life. It resulted in her having tremendously bad credit which led to her having depression among other things.

The case against a ninth defendant - Dwayne Biggs - was transferred to the Northern District of Georgia. He also pleaded guilty and is awaiting sentencing.

“USPIS has sought for hundreds of years those who use the Postal Service for illegal gain,” said Gonzalez. “This investigation was an excellent example of a partnership between federal law enforcement agencies working together to bring down this fraud conspiracy. I fully commend the hard work and countless hours put forth which resulted in bringing these individuals to justice.”

“Today’s sentencing should send a clear message that the U.S. government will not tolerate the systematic victimization of our citizens by identity thieves,” said Goss. “IRS-CI and our law enforcement partners are dedicated to fighting identity theft and the chaos it causes in the lives of the victims.”

From 2010 through 2013, the co-conspirators used the stolen personal identifying information to file thousands of fraudulent tax returns claiming more than $12 million in refunds. According to IRS records, the National Treasury paid out more than more than  $7 million before the scheme was discovered.

White played a key role in recruiting and organizing and was considered the number one leader in this conspiracy. Not only did he recruit Shelton and Thornton, but he also gave instructions to co-conspirators on what to do in this scheme, acquired stolen information and filed the false tax returns. Additionally, once he recruited letter carriers, he instructed them to mail refund cards to him or Willingham. He also  moved the scheme to Houston when he realized law enforcement was on their trail.

Willingham is considered to be the second in command. He entered into the conspiracy in 2010 when he was approached by White while in Georgia and continued with the scheme until their relocation to Houston in 2012. Not only did Willingham assist in the filing of the false tax returns, he recruited letter carriers and received the packages from Shelton as well. Willingham was also responsible for recruiting Vallier to participate in in this scheme and provided instructions to Shelton regularly.

While White and Willingham were the main leaders in this organization that committed tax fraud and identify theft on an unprecedented scale, in order for the conspiracy to function as efficiently as it did, they had to recruit trusted agents to assist them. Hunter had access to the Fulton County, Georgia, Sheriff’s Office database including names, birth dates and Social Security numbers of arrestees, inmate and employees. He sold that personally-identifiable information (PII) to Biggs who then provided it to Ruffin. Ruffin acted as a conduit, funneling the stolen PII to the co-conspirators in Houston. From 2010 through 2013, White and Willingham used the stolen PII to file thousands of fraudulent tax returns claiming more than $12 million in refunds. The tax refunds generated by the fraudulent returns were often deposited onto reloadable debit cards and mailed to addresses under control of the conspirators. Vallier, Jackson-Lezeau and Shelton allowed fraudulent refunds to be mailed to addresses on their routes. After gathering the mail containing the refund debit cards, they sent them to their co-conspirators in Houston.

Shelton, White, Willingham and Thornton are in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future, while Jackson, Vallier, Ruffin and Hunter were permitted to remain on bond and voluntarily surrender at a later date.

The charges were the result of a joint investigation conducted by USPIS and IRS-CI. Assistant U.S. Attorney Suzanne Elmilady is prosecuting the case.

Updated November 9, 2015

Financial Fraud