Byrd and Dailey, Tax Fraud Conspiracy, Alabama 2011

Two Alabamians are facing the music for their role in a massive tax fraud scheme that left the IRS footing the bill for millions of dollars in false refunds. Valerie Byrd and Isaac Dailey, both residents of Montgomery County, Ala., pleaded guilty to conspiring to defraud the United States in a scheme that spanned from February to April 2011.

According to court documents, Byrd conspired with others to fraudulently obtain tax refunds by using stolen identities to file false income tax returns. The scheme involved opening up four bank accounts to receive tax refunds from the scheme, which were then disbursed to her co-conspirators or withdrawn in cash.

Byrd retained a portion of the proceeds for herself and was responsible for funneling tens of thousands of dollars in false tax refunds to her co-conspirators. The scheme was part of a larger conspiracy that saw millions of dollars in false tax refunds filed in the state of Alabama.

Isaac Dailey was previously indicted by a federal grand jury in December 2010 on charges stemming from the tax fraud and identity theft conspiracy. Dailey permitted his co-conspirators to deposit fraudulent tax refunds into his bank account, which he then withdrew and provided to various co-conspirators. He also retained a portion of each transaction.

Both Byrd and Dailey face a maximum of 10 years in prison, three years of supervised release, restitution and a maximum fine of $250,000, or twice the loss caused by the offense. Sentencing has not yet been scheduled for either defendant.

The cases were investigated by Special Agents of the IRS – Criminal Investigation. Trial attorneys Jason H. Poole and Michael Boteler of the Justice Department’s Tax Division, and Assistant U.S. Attorney Jared Morris of the Middle District of Alabama are prosecuting the case.

Additional information about the Justice Department’s Tax Division and its enforcement efforts can be found at www.justice.gov/tax.

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