The plan seemed perfect to the three young Sacramento women: use internet tax software like TurboTax, steal Social Security numbers, and start filing fraudulent tax returns in the hopes of getting large refunds.  However, the United States criminal justice system caught up with Tomisha McKinnee, Nadiyah Woods, and Nakia Vaughn and has now sentenced McKinnee to five years in federal prison.

The women didn't stop with just filing a few fraudulent tax returns.  Over 280 total fraudulent returns were made by the women, using a scheme that involved a special feature of TurboTax.  The software allows tax filers to request that their money be given back to them in any of several ways. 

While most people opt for checks or direct deposit into their banks, this was more difficult when using false identity information.  Instead, the women chose to have TurboTax send a debit card called a Green Dot card in their names.  The women then fraudulently activated and used the debit cards to purchase goods and services after having them sent to several different addresses throughout the Sacramento area.

The case was brought by the Internal Revenue Service after discrepancies were noted, including a large number of tax refunds going to the same addresses.  Many victim taxpayers were robbed of their identities and were initially unable to claim their refund amounts because they had already been claimed by McKinnee, Vaughn, and Woods.  In total, the tax refunds that McKinnee, Woods, and Vaughn attempted to receive were worth just over $1.3 million.  Out of that, nearly one million dollars was actually sent by the IRS to McKinnee and her co-conspirators.

When the three women were caught and indicted, it was found that two of them were already on probation for other, unrelated offenses.  Wood and Vaughn have both pled guilty, and their sentences will be delivered in early to mid December.

In addition to serving five years in prison and another three years on a supervised release program, McKinnee is to pay restitution in the amount of $962,079, the exact amount that she and her co-conspirators were able to defraud from the Internal Revenue Service.

Woods and Vaughn are each charged with multiple counts of tax fraud and filing false claims.  It is possible that they could be sentenced to up to 35 years in prison each, but it is likely that the sentence will be significantly lower after judges examine the totality of factors of the cases in conjunction with Federal Sentencing Guidelines.

According to the IRS, the investigation and prosecution of McKinnee, Woods, and Vaughn “sends a clear message that such schemes result in significant jail time.”  E-filing has made this type of tax refund scheme increasingly common in recent years.  Tax fraud and tax evasion are serious crimes that cost the United States government hundreds of millions of dollars each year.  Most tax evasion schemes today revolve around under-reporting income, while tax fraud tends to come from identity theft.

Source: justice.gov