Terrylyn McCain, Tax Evasion, California 2015

A federal jury in Sacramento, California has delivered a guilty verdict against Terrylyn McCain, 67, of Stockton, on all counts in a high-profile tax evasion case.

McCain was found guilty of a scheme to defraud the United States by filing false tax returns and buying gold with the proceeds of the fraud.

The jury found McCain guilty of four counts of mail fraud in the fraud scheme for mailing false tax returns, four counts of making false claims against the United States by falsifying personal income tax returns for tax years 2005 to 2008, and three counts of money laundering for buying gold with proceeds of the fraud.

According to court documents and evidence introduced at trial, McCain mailed tax returns to the IRS and claimed that banks, tow truck companies, department stores, interior designers, and even her gardener had withheld income due to her. To support her scheme, she utilized false documents that indicated significant tax withholdings, including 1099-OID forms that were purportedly issued by financial institutions such as Bank of Stockton and national retailers such as Costco and Target.

In total, McCain filed at least 12 fraudulent returns that sought nearly $3 million in tax refunds. In just one instance, early in the scheme, the IRS refunded $156,373 to McCain. Within the month, she had used the refund money to purchase approximately $62,000 in gold coins, forming the basis for the money laundering charges.

Terrylyn McCain, 67, of Stockton, California, was found guilty today by a federal jury of a scheme to defraud the United States by filing false tax returns and buying gold with the proceeds of the fraud, United States Attorney Benjamin B. Wagner announced. The jury deliberated less than two hours.

McCain faces a maximum sentence of 20 years in prison for the mail fraud counts, five years in prison for the false claims against the United States counts, and 20 years in prison for the money laundering counts. The actual sentence will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

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