Los Angeles – June 22 2010 – A Westchester man was arraigned this morning in United States District Court on charges alleging that he was a part of a conspiracy to file false claims against the Internal Revenue Service.
Dion Demetri Jones pleaded not guilty this morning after being indicted earlier this month on charges that include conspiracy to defraud the government and three counts of making false, fictitious or fraudulent claims against the United States. The charges are related to a tax return scheme that Jones, along with Isaac Roitman Schultz, allegedly operated from over an 18-month period that ended in September 2007. Jones and Schultz are accused of filing false tax returns with the IRS based upon fictitious gambling winnings and withholdings.
According to the indictment, Jones recruited individuals to file tax returns that sought tax refunds based on fictitious gambling winnings and losses. Schultz allegedly provided information that was used to create fraudulent Form W-2Gs that falsely claimed gambling winnings and tax withholdings. Jones then provided a false W-2G that was presented to a tax return preparer, along with other information, for use in preparing a false tax return.
The indictment specifically alleges that Jones and Schultz caused four United States Individual Income Tax Returns, Forms 1040, to be filed with the IRS. The returns filed with the IRS claimed approximately $263,002 in refunds, based upon fictitious gambling winnings, losses and withholdings, which Jones and his co-conspirators were not entitled to receive.
Schultz was also charged with two counts of theft of public money and one count of aggravated identity theft related for allegedly stealing two United States Treasury checks with a total value of $138,647.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until proven guilty in court.
If convicted of all charges specified in the indictment, Jones faces a statutory maximum 25 years in federal prison and fines totaling $1,000,000. Schultz faces a statutory maximum 30 years in federal prison and fines totaling $750,000.
Trial for Jones has been scheduled for August 10, 2010 before United States District Judge Stephen V. Wilson.
An arrest warrant has been issued for Schultz and authorities are currently trying to determine his whereabouts.
The investigation and prosecution of Jones and Schultz was conducted by IRS – Criminal Investigation in Los Angeles and the United States Attorney’s Office for the Central District of California.