Samuel A. Aaron, Conspiracy to Defraud the Government, Washington, …

GRIMY TIMES EXCLUSIVE: A married couple from Whidbey Island, Washington, who both enjoyed lengthy careers as federal employees, were sentenced today to prison for conspiracy to defraud the government and making false or fraudulent claims. The husband, SAMUEL A. AARON, 71, was handed a sentence of 30 months, while his wife, DEBRA A. AARON, 60, was sentenced to five years. Both were ordered to serve three years of supervised release and pay $723,275 in restitution.

Chief Judge Marsha J. Pechman, noting SAMUEL AARON’s distinguished military service and over 25 years at the Federal Aviation Administration, sternly remarked, ‘This kind of theft from the government cannot go on. You violated the trust of every veteran; you violated the trust of every school child; you violated the trust of every employee of the FAA.’

Records indicate that in 2008, the AARONs promoted a fraudulent tax scheme known as 1099 OID fraud, falsely claiming they were owed $723,275. DEBRA AARON also filed similar claims for 30 others, totaling over $14 million. Approximately $4 million was paid out before the IRS uncovered the scam. The proceeds were funneled through a shell company and used for luxuries, including home renovations, expensive trips, and lavish outings.

DEBRA AARON, who retired as a management consultant for the FAA after a long career in various government jobs, was told by Chief Judge Pechman that her actions were driven by greed. ‘The public trust has been violated,’ she said. The judge also noted that DEBRA AARON had lured at least two friends into the scheme, leaving them with lives “quite devastated” by their criminal conviction and sentence.

U.S. Attorney Jenny A. Durkan emphasized the importance of cautioning taxpayers against falling victim to such scams. The IRS has repeatedly warned about 1099-OID fraud, advising that those who encourage false claims could face financial penalties or even criminal prosecution. The case was investigated by IRS Criminal Investigation and prosecuted by Assistant United States Attorneys Kate Vaughan and Thomas Woods.