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Prison Tax Fraud Ringleader Busted
SACRAMENTO, Calif. – Edwin Ludwig IV, 34, an inmate in an Oklahoma state prison, has been sentenced to seven years in prison for conspiring to defraud the United States and for filing false claims for federal tax refunds.
Ludwig was ordered to pay over $219,000 in restitution, according to a sentencing order issued today by United States Attorney Benjamin B. Wagner. The restitution is a significant portion of the approximately $219,984 in fraudulent refunds that were issued as a result of the conspiracy.
According to court documents, Ludwig and three fellow inmates at the California Correctional Center in Susanville obtained personal identification information of other inmates at the correctional center. Ludwig then provided the information to co-defendants on the outside who prepared and filed false income tax returns with the Internal Revenue Service, claiming refunds to which the inmates were not entitled.
The conspiracy began in March 2011 and continued until an investigation was launched in January 2012, when a correctional officer found some records behind Ludwig’s personal locker. The investigation, which was conducted by the Internal Revenue Service, Criminal Investigation, the Federal Bureau of Investigation, and the Investigative Service Unit at the California Correctional Center, found that the refunds were used for personal expenditures, including the purchase of prepaid debit cards and adding money to inmates’ commissary accounts.
At sentencing, Ludwig stated that some of the proceeds had been used to purchase drugs, which is a disturbing revelation in a case that highlights the brazen nature of the conspiracy. In all, the conspiracy resulted in at least 247 false claims for income tax returns in tax years 2008 through 2011.
Charges against six co-defendants are pending, with a status conference scheduled for September 2, 2015. The charges are only allegations, and the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt. Assistant United States Attorney Sherry D. Hartel Haus is prosecuting the case.
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Key Facts
- State: California
- Category: Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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