Criminal Justice

Jury convicts IRS worker of masterminding bogus tax refund scheme

A federal jury in Philadelphia on Wednesday convicted a former Internal Revenue Service employee of masterminding a scheme to collect fraudulent tax refunds while working at the IRS, often using straw filers.

Aware that the IRS didn’t check telephone tax credit requests from filers owed less than $1,500, or ask for evidence from those seeking first-time homebuyer credits of up to $8,000, customer service representative Patricia Fountain recruited drug addicts, welfare recipients and ex-cons to make bogus filings and split the proceeds from refund checks totaling $400 to $3,000, the government said.

If participants reneged on the promised refund check split, Fountain allegedly used her position within the IRS to target them for tax agency collections, reports the Philadelphia Inquirer.

However, her lawyer, Michael Engle, suggested to the jury that Fountain’s name was used without her knowledge, to lend credibility to the refund scheme, after word went round the neighborhood that the IRS was an easy target.

Now 35, Fountain could get as much as 12 years in prison when she is sentenced in June. Two co-defendants, including her boyfriend, were convicted on similar charges.

A CBS Local article, a grand jury indictment (PDF), and a U.S. Attorney’s Office press release provide more details about the case against her.

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