Final Two Defendants Sentenced for Roles in Sophisticated Tax Scheme
Richard and Diane Powers Are Final Two Defendants Sentenced to Federal Prison
ABINGDON, VIRGINIA – The final two defendants involved in a sophisticated tax conspiracy to defraud the United States government were sentenced last week in the United States District Court for the Western District of Virginia in Abingdon, United States Attorney John P. Fishwick Jr. announced today.
Richard Powers, 68, and Diane Powers, 58, both of Gate City, Virginia, each previously pled guilty to one count of conspiracy to defraud the United States government and one count of filing a false claim. Last week the District Court sentenced Richard Powers to 37 months in federal prison and his wife, Diane Powers, to 27 months in federal prison.
“Protecting the integrity of our tax system is of the utmost importance to the law enforcement community,” United States Attorney John P. Fishwick Jr. said today. “This investigation showed just how serious we take the investigation and prosecution of those who attempt to undermine that system. I am thankful to all of our partner agencies who worked together to dismantle this sophisticated conspiracy.”
The other defendants involved in the conspiracy, who were all related to each other in some manner, have previously been convicted and sentenced for their roles in the scheme on related charges. David Witt, 36, of Jonesville, Virginia, who masterminded the conspiracy while an inmate in a Tennessee State prison, was sentenced to 96 months in Federal Prison. William Ziehler, 38, of Pennington Gap, Virginia, was sentenced to 51 months in federal prison. Tommy Witt, 57, of Jonesville, Virginia, was sentenced to 30 months in federal prison. In addition, each defendant was ordered to pay the United States $67,356 in restitution, jointly and severally.
According to evidence presented in District Court by Special Assistant United States Attorney Kevin Jayne, David Witt, his four codefendants (father, mother, uncle, and brother), and others, participated in a sophisticated conspiracy to defraud the federal government. The scheme began when Witt, at the time an inmate in a Tennessee state prison, gathered personally identifiable information (including birth dates and social security numbers) belonging to other inmates, which he then used that information to complete Internal Revenue Service (IRS) Form 1040s. These Form 1040s contained false information, including false addresses outside of prison and false claims that the inmates were due a tax refund based on wages never earned by those inmates. Subsequently, these Form 1040s were sent to persons outside of the prison who then forwarded the Form 1040s to the IRS for processing. Based on these Form 1040s, the IRS issued tax refund checks in the names of these inmates and sent the checks to addresses associated with Witt’s accomplices in the scheme. Many of these tax refund checks were cashed at banks throughout Southwest Virginia by persons using fraudulent power-of-attorney forms. Return payment was made to Witt and others by use of electronic transfers, such as MoneyGram, and by other means.
The investigation of the case was conducted by the Internal Revenue Service Criminal Investigation and United States Postal Inspection Service. Special Assistant United States Attorney Kevin Jayne prosecuted the case for the United States.