Prison Tax Fraud Ringleader Pleads Guilty to Filing False Claims for Federal Tax Returns | WPN World People News

Edwin Ludwig IV, 34, currently an inmate in an Oklahoma state prison, pleaded guilty on April 22 to one count of conspiracy to defraud the United States and two counts of filing false claims for federal tax refunds, United States Attorney Benjamin Wagner announced.

According to court documents, beginning in March 2011, Ludwig and three fellow inmates in 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. False tax returns also were filed in some of the defendants’ own names. The defendants caused the false refund checks to be deposited to various bank accounts they controlled. According to the indictment, the investigation into the conspiracy began on January 11, 2012, when a correctional officer found some records behind Ludwig’s personal locker.

According to court documents, the refunds were used for personal expenditures, and included the purchase of prepaid debit cards, and adding money to inmates’ commissary accounts. In all, the conspiracy resulted in at least 247 false claims for income tax returns in tax years 2008 through 2011. Although the IRS stopped some of the refunds, approximately 138 fraudulent refunds totaling approximately $219,984 were issued.

This case is the product of an investigation by the Internal Revenue Service, Criminal Investigation, the Federal Bureau of Investigation, and the Investigative Service Unit at the California Correctional Center. Assistant United States Attorney Sherry D. Hartel Haus is prosecuting the case.

Ludwig is scheduled to be sentenced by Judge Kimberly J. Mueller on July 8, 2015. On the conspiracy count, he faces a maximum statutory penalty of 10 years in prison and a $250,000 fine. He faces additional a maximum sentence of five years in prison and a $250,000 fine on each false claims count. Any sentence, however, would 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.

Source: U.S. Federal Bureau of Investigation