Two Plead Guilty to Tax Refund Conspiracy

KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that two defendants have pleaded guilty in federal court to their roles in a tax refund conspiracy.

Theresa R. Gee, 45, of Kansas City, Mo., pleaded guilty today before U.S. District Judge Gary A. Fenner to one count of conspiracy to defraud the government. Co-defendant Nathaniel J. Justice, 43, formerly of Kansas City, Mo., pleaded guilty to the same charge on Thursday, April 7, 2016.

By pleading guilty, Gee and Justice admitted that they participated in a conspiracy from March 29, 2011, to Feb. 10, 2013, to submit false claims for federal income tax refunds.

The tax refund scheme involved the creation of false and fraudulent Form W-2s. The false W-2 forms reported fictitious employer information, fictitious income, fictitious income tax withholdings, fictitious dependents and other false information. Gee and Justice provided false W-2 forms to others (“filers”) who would then use the false W-2s to fraudulently file for federal and state income tax returns. Sometimes they would escort the filer inside H&R Block and assist the filer in the preparation of the fraudulent tax forms.

Gee and Justice recruited filers into the conspiracy through family relationships, friendships and other personal contacts. Conspirators promised each filer a portion or percentage of the illegally obtained refund. Gee and Justice also paid a fee – typically $500 – to those who referred a filer who was willing to participate in the scheme.

At the completion of the tax preparation process Gee and Justice retained the filer’s Emerald Card. (The Emerald Card would access an ATM account upon which the return would automatically be down-loaded.) Gee and Justice withdrew the refunds, gave a portion of each refund to the filer and kept a substantial portion for themselves.

The loss attributable to Gee and Justice is as much as $160,000. Gee and Justice are jointly and severally liable for restitution.

Under federal statutes, both Gee and Justice are subject to a sentence of up to 10 years in federal prison without parole. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory sentencing guidelines and other statutory factors. Sentencing hearings will be scheduled after the completion of presentence investigations by the United States Probation Office.

This case is being prosecuted by Senior Litigation Counsel Gregg Coonrod. It was investigated by IRS-Criminal Investigation.