Mary Galan, 66, of Twin Falls, Idaho, was sentenced to 24 months in federal prison for conspiring to defraud the IRS of $336,926 through a scheme involving fraudulent education tax credits. The sentence, handed down in U.S. District Court in Boise, includes three years of supervised release and full restitution to the Internal Revenue Service. Chief U.S. District Judge B. Lynn Winmill also ordered Galan to forfeit the entire amount.
Galan pleaded guilty on October 19, 2016, to one count of conspiracy to defraud the United States. From 2013 to 2015, she orchestrated a scheme through her business, Galan Accounting, falsely claiming American Opportunity Tax Credits for clients who had no eligible college expenses. Despite owning and operating the firm since 2006, her actions crossed the line from tax preparation to outright fraud.
According to court documents, Galan and her co-conspirators filed 187 returns for 165 clients, claiming $342,901 in education credits based on $787,630 in supposed qualified expenses at the College of Southern Idaho. In reality, only $8,905 in legitimate expenses were paid by six students—entitling the clients to just $5,975 in actual credits. The resulting tax loss to the government: $336,926.
Galan didn’t verify eligibility. She didn’t demand proof of payment. Instead, she routinely asked clients only if they had children of college age—then claimed the credits anyway. In some cases, she rerouted IRS refunds directly into her own bank accounts and those of her associates. She personally received $219,490 in stolen refunds funneled through her clients’ returns.
“This prosecution and sentence send the clear message that those who defraud the federal government by claiming tax credits to which they are not entitled will be swiftly and surely brought to justice,” said U.S. Attorney Wendy J. Olson. “This defendant’s scheme cheated all taxpayers, and therefore all Americans.”
“Tax return preparers have a duty to their clients to prepare tax returns that comply with the law and are complete and accurate,” said Steven Osborne, Special Agent in Charge of IRS-Criminal Investigation in Idaho. The case was investigated by IRS-CI and is part of the broader Financial Fraud Enforcement Task Force initiative targeting financial crimes across the U.S.
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Key Facts
- State: Idaho
- Agency: DOJ USAO
- Category: Fraud & Financial Crimes
- Source: Official Source ↗
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