New Jersey Man Indicted for Promoting Tax Fraud Scheme
A federal grand jury sitting in Camden, New Jersey has returned an indictment, which was unsealed, charging an Atlantic City man with conspiring to defraud the United States by promoting a tax refund scheme, filing false claims, and obstructing the internal revenue laws, on August 31, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division.
According to the indictment, Kenneth Crawford, Jr., and his co-conspirators, between 2015 and 2016, promoted and executed a “mortgage recovery” tax fraud scheme by assisting client taxpayers in obtaining the payment of false claims for tax refunds from the Internal Revenue Service (IRS). The alleged scheme was premised on a false claim that clients could recover, through tax refunds, mortgage debt they owed and paid to financial institutions. To promote the scheme, Crawford allegedly recruited and convinced clients, many of whom were behind on mortgage payments and faced foreclosure, to file false tax returns seeking tax refunds. Crawford and his co-conspirators then allegedly caused false tax forms to be filed with the IRS to make it appear that clients were eligible for refunds by falsely claiming that substantial amounts of taxes had been withheld and paid to the IRS.
The indictment further alleges that when the IRS discovered the fraud and attempted to recover the refunds issued, Crawford supplied clients with false documents to send to the IRS in response to IRS demands and warning letters. Crawford allegedly instructed clients on how to deceive the IRS by, among other things, concealing his role in causing the false returns to be filed.
The indictment charges that Crawford’s scheme resulted in over $2.3 million in fraudulent refund claims being submitted to the IRS, of which the IRS paid out more than $1.3 million. Crawford allegedly charged his clients a fee for his services of approximately 25 percent of the refund obtained.
If convicted, Crawford faces a statutory maximum sentence of five years in prison for the conspiracy charge, five years in prison for each false claim count, and three years in prison for obstructing the internal revenue laws. He also faces a period of supervised release, restitution, and monetary penalties. An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Source: U.S. Department of Justice
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