Kim Earlycutt, Shannon King and Marcia Farmer all pleaded guilty to federal charges over the course of the past year.
The women, who are all from the state of Georgia, used identities of foreign nationals to file fraudulent tax returns.
They succeeded in getting tax return cheques for more than $5m and used the money for personal expenses, including car insurance and gambling.
“The defendants went to great lengths to steal tax money from the IRS, with the twist in this case that they used stolen identities of foreign nationals to seek phony refunds,” said US attorney John Horn.
“It all comes back to basic theft to enrich themselves at the expense of the taxpayers.”
The scam
According to Horn, the three defendants obtained and forged foreign identity documents in connection with their work at T&K Tax Services and More, which Earlycutt part owned.
Using these documents, they submitted IRS W-7 forms to get individual taxpayer identification numbers (ITINs).
The defendants then created false and fraudulent tax claim forms, specifically Forms 1040, or individual income tax returns, using these ITINs.
Attached were falsified W-2 forms, which had fraudulent employer information, income, withholding amounts, and deduction amounts.
They would then file the fake tax returns with the IRS, by mailing them and using T&K’s electronic filing number. The returns all contained requests for refunds that were not actually due.
The three women “enriched themselves by retaining a portion of the tax refunds that had been fraudulently obtained, including in some instances the entire refund”, the statement by the US Attorney’s Office for the Northern District of Georgia read.
In all, they sought refunds in excess of $7m and actually received over $5m. They used the money to pay personal expenses, with Earlycutt using some of her cut for gambling.
The sentences
Earlycutt, 54, was sentenced to nine years in prison to be followed by three years of supervised release, and ordered to pay restitution in the amount of $5,222,634.
King, 37, was sentenced to four years, six months in prison to be followed by three years of supervised release, and ordered to pay restitution in the amount of $2,596,169.
Earlycutt and King were convicted on 15 June.
Farmer, 51, was sentenced to one year, six months in prison to be followed by nine months of home confinement, and three years of supervised release. She was ordered to pay restitution in the amount of $3,370,811.
Farmer pleaded guilty on 28 October 2016.
Jail time
“Identity theft continues to victimise unknowing individuals as well as the IRS. If you steal someone’s identity and file false tax returns, you will be prosecuted,” said acting special agent in charge James E. Dorsey, IRS Criminal Investigation.
“These sentencings should serve as a clear message to the public, theft will cost you significant jail time.”
