OAKLAND – LAWFUEL – The Law News Network – The United States Attorney’s Office for the Northern District of California announced that Rotanya L. West plead guilty today to filing false claims for tax refunds with the Internal Revenue Service. A second defendant, Tanika R. Gibson, pleaded guilty to filing a false claim for a tax refund on October 17th.
Ms. West, of Citrus Heights (near Sacramento), and Ms. Gibson, of Oakland, were indicted by a federal grand jury on April 14, 2005. Ms. West was charged with 132 counts of filing false claims for tax refunds with the Internal Revenue Service in violation of 18 U.S.C. § 287. Under the plea agreement, Ms. West pleaded guilty to six counts. Ms. Gibson was charged with 5 counts of filing false claims for tax refunds with the Internal Revenue Service in violation of 18 U.S.C. § 287. Under the plea agreement, Ms. Gibson pleaded guilty to one count.
In pleading guilty, Ms. West admitted to recruiting family members, friends and strangers, from whom she obtained personal information required to prepare tax returns (names, children’s names, social security numbers, and dates of birth), and to filing 132 false federal income tax returns claiming $315,479 in false refunds. She prepared or caused to be prepared false income tax returns that contained false Schedules C (Profit and Loss from Business) for each taxpayer which showed a net profit from a fabricated business sufficient to allow an earned income credit. The earned income credit is a tax credit for low-income working taxpayers who have earned income below a certain threshold amount. The credit will generate a refund payment to the taxpayer if little or no income tax is owed. By preparing or causing to be prepared the false Schedules C, Ms. West was able to generate false tax refund payments based on the earned income tax credit. The total tax loss to the government for sentencing purposes is $273,029.
“The IRS is actively looking for schemes like these, and will recommend criminal prosecutions whenever appropriate,” said Roger L. Wirth, Northern California IRS Special Agent in Charge. “Tax crimes affect us all. There were real victims here in addition to the government. When anyone cheats the tax system, we’re all cheated.”
In pleading guilty, Ms. Gibson admitted to filing similar false claims for refunds. The total tax loss to the government for sentencing purposes from the five false claims filed by Ms. Gibson is $6,128.
The sentencing of Ms. West and Ms. Gibson is scheduled for January 23, 2006, before Judge Wilken in Oakland. The maximum statutory penalty for each count of filing a false claim for tax refund with the Internal Revenue Service in violation of 18 U.S.C. § 287 is five years and a fine of $250,000, plus restitution in the amount of $182,106 for Ms. West and $3,049 for Ms. Gibson. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
David L. Denier is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Kathy Tat. The prosecution is the result of a three year investigation by agents of the Internal Revenue Service’s Criminal Investigation Division.
