Local Woman Heads to Federal Prison for Two Separate Fraud Schemes

HOUSTON – A 38-year-old resident of Humble has been ordered to federal prison following her convictions in two separate schemes to defraud, announced U.S. Attorney Kenneth Magidson.

Cheryl Reed Johnson aka Shawnee Reed and Cheryl Reed pleaded guilty to engaging in a conspiracy to commit bank, mail and wire fraud as well as making false statements to a bank and wire fraud in the first case as well as conspiracy to commit mail and wire fraud, conspiracy to make false claims to the IRS and making a false claim to the IRS in another case.

Today, U.S. District Judge Gray Miller, who accepted the guilty pleas in both cases, ordered Johnson serve a total of 151 months in federal prison to be immediately followed by three years of supervised release. She was further ordered to pay  $2,742,018.25 in restitution to her victims.

In the first scheme, Johnson illegally used various Social Security numbers not assigned to her by the Commissioner of Social Security from approximately January 2005 through February 2014. She would use those numbers in order to obtain loans from banks and other lending institutions to purchase houses and vehicles as well as to obtain credit cards and personal loans.

The second case was a tax refund fraud conspiracy. This scheme involved the electronic submission of federal tax returns in the names of numerous individuals, each of which falsely claimed tax credits that resulted in a refund. Johnson and others claimed more than $2.2 million in false first time home buyer credits on 2008 returns they filed with the IRS. The fraudulent claims resulted in Johnson and her co-conspirators claiming more than $2.3 million in fraudulent refunds. The defendants directed most of those refunds into their bank accounts or those of their co-conspirators

She will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.

Both cases are the result of investigations conducted by the U.S. Postal Inspection Service and IRS - Criminal Investigation. Assistant U.S. Attorney Melissa Annis is prosecuting the cases.