Charlotte Area Tax Return Preparer Pleads Guilty To Multi-Million Dollar Tax Return Fraud

CHARLOTTE, N.C. – A Charlotte-area tax return preparer pleaded guilty today to aiding or assisting in the filing of a false claim for tax refund, announced Jill Westmoreland Rose, Acting U.S. Attorney for the Western District of North Carolina.  Fitzroy E. Lawrence, 48, of Charlotte, appeared before U.S. Magistrate Judge David S. Cayer and admitted to aiding and assisting in the filing of hundreds of false tax returns that were filed with the IRS seeking fraudulent tax refunds totaling approximately $2.6 million.

According to the filed court documents and today’s plea hearing, for tax years 2008 through 2011, Lawrence aided and assisted in the preparation of hundreds of false tax returns, many of which included false wages and false dependent information.  In pleading guilty, Lawrence also admitted that the tax loss associated with the offense is $2,635,641.

Lawrence pleaded guilty to one count of aiding or assisting in filing a false claim against the United States.  The maximum penalty for this charge is five years in prison and a $250,000 fine.  As part of today’s plea agreement, Lawrence has agreed to pay restitution, the amount of which will be determined by the Court at his sentencing hearing, which has not been scheduled yet.  Lawrence was released on bond following his plea hearing.

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In a separate case, another Charlotte-area tax return preparer pleaded guilty for his role in filing false tax returns for clients.  Malik Shropshire, 43, of Charlotte, appeared before Judge Cayer today and admitted to conspiring to file false tax returns and lying on a loan application.  Shropshire’s conspirator, his sister Nkhenge Shropshire, was sentenced to 33 months in prison for her participation in the scheme in October 2014 in a related case.

According to the filed court documents and today’s plea hearing, beginning in 2010 and continuing through 2012, Shropshire worked as a tax preparer and a financial advisor.  Shropshire and his conspirators recruited individuals to have their tax returns prepared by promising large refunds.  For tax years 2008 through 2011, Shropshire aided and assisted in the preparation of hundreds of false tax returns that were filed with the IRS.  Most of these tax returns were false because, among other things, they included false Schedule C businesses, false dependents, and false refundable education credits.  As a result of the inclusion of the false information on the tax returns, the taxpayers’ tax liabilities decreased, the taxpayers received larger tax refunds, and the taxpayers qualified for the Earned Income Tax Credit.

Shropshire pleaded guilty to one count of conspiracy to impede the IRS and one count of making a false statement on a loan application.  The maximum penalty for the conspiracy charge is five years in prison and a $250,000 fine.  The maximum penalty for the false statement on a loan application is 30 years in prison and a $1,000,000 fine.  Shropshire was released on bond following his plea hearing.

Acting U.S. Attorney Rose thanked the Internal Revenue Service, Criminal Investigation Division (IRS-CI) under the direction of Special Agent in Charge Thomas J. Holloman, III, Special Agent in Charge, for the investigation of both cases.  Ms. Rose also thanked Thomas L. Noyes, Inspector in Charge of the Charlotte Division of the U.S. Postal Inspection Service, for his agency’s assistance with Shropshire’s investigation.

Assistant United States Attorney Jenny G. Sugar of the U.S. Attorney’s Office in Charlotte is in charge of the prosecution of both cases.