Leader of Stolen Identity Refund Scheme Sent to Federal Prison
HOUSTON – Ronald Dewayne Hadley has been ordered to prison following his conviction for leading a Houston-area stolen identity refund fraud (SIRF) scheme, announced U.S. Attorney Kenneth Magidson along with Special Agent in Charge Rick Goss of IRS - Criminal Investigation (CI) in Houston.
Hadley pleaded guilty Aug. 28, 2015. Today, U.S. District Judge Melinda Harmon handed him a 48-month term in federal prison to be immediately followed by three years of supervised release. Judge Harmon also ordered Hadley to pay $317,790 in restitution to the IRS.
Three others also pleaded guilty in the scheme - Lyndell Leroy Price, Leondray Demond Garrison and Ryan Duron Clay – who will sentenced at later dates.
“This investigation demonstrates IRS-CI’s ability to detect identity thieves who believe they are protected under the cover of anonymity, said Mary Hammond, Assistant Special Agent in Charge of IRS-CI. “Perpetrators at all levels in a stolen identity refund fraud scheme will be pursued and prosecuted.”
According to information in the respective plea agreements, Hadley led a conspiracy to submit false tax returns to the IRS for tax years 2010 through 2012, which sought fraudulent refunds totaling approximately $811,710. The scheme began in the fall of 2011 when Hadley began to prepare and electronically file tax returns which falsely reported that taxpayers were barbers who had earned no wages but had received thousands of dollars of dividend income. The income was purportedly from supplies on which they had supposedly paid thousands of dollars of fictitious withholding taxes that were entitled to be refunded.
Hadley obtained taxpayer identification information both directly from these individuals as well as indirectly through the assistance of Price, Garrison and Clay. Hadley and his conspirators obtained debit cards in the names of these people whose identities were then used to electronically file false refund claims anonymously via public wi-fi access provided by local fast-food restaurants and a coffee shop. Hadley had the refunds credited to debit cards under the conspirators’ control. The co-conspirators withdrew the fraudulent refunds at local ATMs and used the debit cards at businesses spread across central, north and northwest Houston and Houston’s Third Ward.
The scheme began to unravel in the third tax season when IRS fraud detection measures revealed suspicious patterns among the fraudulent refund claims and took steps to prevent all but three of the claims submitted that year from being paid.
According to the pleas, Hadley e-filed all of the fraudulent tax returns and personally originated identity information for approximately half of the refund claims. His conspirators provided him with the remaining identities. Price provided Hadley with identities that generated fraudulent refund claims totaling almost $250,000 resulting in actual losses to the IRS of almost $130,000. Garrison provided identities that generated fraudulent refund claims totaling almost $95,000, while Clay provided identities that generated fraudulent refund claims totaling almost $40,000. The resulting in actual losses to the IRS for which Garrison and Clay responsible amounts to approximately $30,000 and $25,000, respectively.
All were permitted to remain on bond.
IRS-CI investigated. Assistant U.S. Attorney Jimmy Sledge Jr. is prosecuting the case.