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Tax Return Preparer Sentenced to 135 Months in Prison
In a federal court in North Carolina, Claude Arthur Verbal II was sentenced to 135 months in prison for tax fraud, healthcare fraud and money laundering crimes. Verbal’s sentence also includes three years of supervised release, and he was ordered to pay restitution of $4,078,584 to the Internal Revenue Service (IRS) and $2,382,378 to the North Carolina Department of Health and Human Services.
Verbal, a former Raleigh resident, owned and operated Nothing But Taxes (NBT), a tax return preparation franchise with 10 branches throughout the state of North Carolina. Verbal personally prepared false tax returns for clients of NBT and taught his employees to do the same. He also falsified returns using false dependents, Schedule C businesses, tip income, Earned Income Tax Credits, and education credits.
Between 2005 and 2007, Verbal prepared dozens of false tax returns on a computer at NBT’s location on Fayetteville Street in Durham, North Carolina. One such return was a 2006 tax return for an NBT client that falsely reported the client had a Schedule C business and a dependent. Verbal knowingly prepared and electronically filed this return with the IRS.
Verbal’s fraudulent schemes victimized taxpayers in multiple ways, damaged the Medicaid program, and the many patients who rely on it. U.S. Attorney Ripley Rand stated that Verbal’s sentence sends a clear message to those who operate fraudulent tax return businesses and that the Justice Department will continue to prosecute and seek just punishment against those who prepare fraudulent tax returns.
The investigation into Verbal and his business began after one of his employees informed a U.S. probation officer of the fraudulent practices at NBT’s Fayetteville Street location. Verbal denied knowledge of the fraud but took steps to distance himself from the practice and continue operating his business.
Claude Arthur Verbal II, owner of Nothing But Taxes (NBT), was previously an Raleigh resident and now resides in Miami. He was sentenced on April 9, 2023, for tax fraud, healthcare fraud, and money laundering crimes. The North Carolina native must serve 135 months in prison, followed by three years of supervised release, and pay restitution to the IRS and the North Carolina Department of Health and Human Services.
Key Facts
- State: North Carolina
- Category: White Collar Crime|Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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