Diallo Dotson, formerly of Battle Creek, Michigan, pleaded guilty today in federal district court to conspiring with Derrick J. Gibson to file false and fraudulent federal income tax returns with the Internal Revenue Service. The plea marks the final conviction in a sprawling $22 million tax fraud conspiracy that exploited the personal data of veterans, VA employees, and Michigan prison inmates to bilk the federal government.
In February 2016, a federal grand jury indicted 34 defendants on charges of conspiracy to defraud the IRS. The scheme involved filing rigged tax returns using stolen Social Security numbers and financial information. The Internal Revenue Service, Veterans Affairs – Office of the Inspector General, United States Postal Inspection Service, the Bureau of Alcohol Tobacco and Firearms, Department of Homeland Security, Battle Creek Police Department, Albion Police Department, Calhoun County Sheriff’s Department, and Michigan State Police conducted a multi-year joint investigation that dismantled the network.
The indictment revealed that defendants obtained personal identification information from patients and staff at the Battle Creek Veterans Affairs Medical Center, as well as from inmates in the Michigan Department of Corrections. Using that data, they filed fraudulent returns claiming over $22 million in refunds. To date, 33 of the 34 charged have pleaded guilty. Romell Bolden was dismissed from the indictment after co-defendant Simone Watkins admitted she and Derrick Gibson filed returns in his name without his knowledge.
Derrick J. Gibson, the alleged ringleader, pleaded guilty on August 16, 2016, and was sentenced on January 6, 2017, to 120 months in prison and ordered to pay $16,000,000 in restitution. Other key figures include Charmica Griffin, who pleaded guilty October 4, 2016; Stephanie T. Baker, October 7, 2016; and Latia M. Williams, a former VA employee, who pleaded guilty November 18, 2016. Alvin E. Stephenson II and Sandria M. Blakley, also former VA staff, admitted guilt in November 2016.
Multiple Gibson family members were enmeshed in the conspiracy. Darwin Gibson pleaded guilty November 4, 2016; Deqynn Gibson on October 26, 2016; Darrien Gibson on October 24, 2016; and Devoine Gibson on November 14, 2016. Prentis H. Gibson pleaded guilty October 11, 2016. Chanel McClenny and Lamont Joyner pleaded guilty December 7 and November 28, 2016, respectively, while Shameika N. Carr entered her plea on November 29, 2016. Bobby Crabtree, a Michigan Department of Corrections inmate, pleaded guilty May 17, 2016, and was sentenced to 30 months in prison consecutive to his state sentence, plus $24,205 in restitution.
Other sentencings have already been carried out. Edward Warden, Jr. pleaded guilty May 4, 2016, and was sentenced October 31, 2016, to 30 months and $110,004 restitution. Scherrie P. McNutt pleaded guilty April 26, 2016, and was sentenced October 11, 2016, to 18 months and $188,398 restitution. Rochelle R. Velasquez was sentenced November 16, 2016, to two years probation and $69,156 restitution. As the final defendant enters a guilty plea, federal prosecutors confirm the case is closed, with millions still targeted for recovery through ongoing restitution efforts.
Related Federal Cases
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Key Facts
- State: Michigan
- Agency: DOJ USAO
- Category: Fraud & Financial Crimes
- Source: Official Source ↗
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