Tax Preparers Indicted for Stolen Identity Refund Fraud

Two women from Phenix City, Alabama, were indicted yesterday for their involvement in a stolen identity refund fraud scheme, Acting Deputy Assistant Attorney General Larry J. Wszalek for the Justice Department’s Tax Division and U.S. Attorney George L. Beck Jr. for the Middle District of Alabama announced today following the unsealing of the indictment.

Teresa Floyd, 63, and her 40-year-old daughter, Lasondra Davis Miles, operated several tax preparation businesses in the Phenix City area, including T & L Tax Service and T & C Used Cars & Tax Service. The indictment alleges that the duo obtained stolen identities and used those identities to file more than 900 federal income tax returns that claimed over $2.5 million in tax refunds.

According to the superseding indictment, Floyd and Davis applied for bank products from various financial institutions, which provided them with blank check stock. The bank products allowed the tax preparers to deduct their fees directly from a tax refund and then print out the remainder of the refund as a check. The defendants created fictitious identification documents and bills to provide to the financial institutions in an attempt to verify that the returns were filed in the names of legitimate customers.

The indictment alleges that the defendants caused the fraudulent checks to be cashed at several businesses in Alabama and Georgia, and that Floyd also deposited fraudulent income tax refund checks into her bank account.

“We will not tolerate these types of schemes that exploit innocent individuals,” said U.S. Attorney George L. Beck Jr. “I want to assure the public that we will continue to investigate and prosecute these types of crimes to the fullest extent of the law.”

If convicted, the defendants face a statutory maximum sentence of 10 years in prison for the conspiracy to file false claims count, a statutory maximum sentence of 20 years in prison for each wire fraud count, a statutory maximum sentence of 10 years in prison for each theft of public money count, and a mandatory sentence of two years in prison for the aggravated identity theft counts.

The case was investigated by special agents of the Internal Revenue Service – Criminal Investigation. Trial Attorney Michael Boteler of the Tax Division and Assistant U.S. Attorney Todd Brown for the Middle District of Alabama are prosecuting the case.

An indictment merely alleges that crimes have been committed, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt.

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