Two tax return preparer cases have been indicted in the last several weeks:

•On February 10, 2004, a federal grand jury indicted TERRENCE EDWARDS, 37, of Riverdale, Georgia, in a twenty-five count Indictment charging him with one count of conspiracy to defraud the United States by filing false income tax returns and fraudulently claiming refunds, eleven counts of identity theft for using the names and Social Security numbers of other individuals to file the fraudulent income tax returns, and thirteen counts of making a false claim against the United States. The indictment charges that EDWARDS prepared income tax returns, using the names and Social Security numbers of other individuals without their knowledge or permission, and filed the returns electronically via the internet. EDWARDS created false W-2s that he used to file the returns. The company names and addresses and the wage and withholding information on
the W-2s were fictitious or false. EDWARDS filed applications for refund anticipation loans with Santa Barbara Bank and Trust, a California bank, requesting that the loan proceeds be electronically deposited into two bank accounts belonging to EDWARDS and his girlfriend. In 2002 and 2003, EDWARDS filed approximately 70 false returns,
generating fraudulent refunds in excess of $ 200,000. The false returns included two that EDWARDS prepared and filed in his own name. The case is being prosecuted by Assistant United States Attorney (AUSA) Teresa D. Hoyt.

•On March 24, 2004, a federal grand jury returned a 26 count Indictment against BEN NYEMAH BADIO, 39 (currently in custody) and his brother, ELROY BADIO, 35, of Marietta, Georgia, both of whom are foreign nationals from Liberia. The Indictment charges the BADIO's with conspiracy to defraud the United States by making false claims for tax refunds, bank fraud, and money laundering. The indictment alleges that BEN BADIO, with the assistance of his brother, ran a return preparation business in Atlanta in which beginning February, 2001, through April, 2002, prepared materially false income tax returns for clients of his business. BEN BADIO devised a scheme to obtain refund proceeds from the federal government through the use of Forms 4136 for Fuel Tax Credit in excess of $1,500,000. This Fuel Tax Credit offset tax liability and the portion of it that exceeded the tax due is payable as a tax refund directly to the taxpayer. The defendants submitted to Santa Barbara Bank and Trust (SBBT) Refund Application Loan (RAL) applications in the same amount. As a result, the IRS issued refunds totaling in excess of $400,000 to SBBT and SBBT issued RAL's totaling the same amount via direct deposit to bank accounts under defendants' control. The case is being prosecuted by AUSA Phyllis Sumner.

•In addition to these two Indictments, two other defendants were sentenced for their role in forging and cashing U.S. Treasury checks obtained through a fraudulent tax return preparation scheme. The defendant preparing the false tax returns falsely claimed the Earned Income Credit in order to generate excessive refund checks. In January, 2004, United States District Judge Jack T. Camp sentenced PATRICK UMBA KISULA, 32, of the Democratic Republic of Congo, to 5-years' probation in connection with his forgery of a United States Treasury check. In a related case, United States District Judge Orinda D. Evans sentenced DIEUDONNE YEGHA, 31, of Cameroon, to 8 months' imprisonment for conspiring to forge signatures on treasury checks. KISULA and YEGHA cooperated with authorities in their investigation of tax return preparer
SEDRIC ROSS, who pleaded guilty to submitting false and fraudulent tax returns last August. ROSS, 38, of Hapeville, Georgia, is awaiting sentencing by United States District Judge Jack T. Camp. These cases were prosecuted by AUSAs Lynn M. Adam and Richard Langway.

United States Attorney Duffey and SAC Vickery warn that fraudulent tax preparer scams are not the only tax crime they investigate and prosecute. Frequently, during the course of non-tax investigations, investigators and prosecutors obtain evidence of tax violations. Prosecutors then seek indictments of those tax offenses as well as the original charges under investigation:

•On December 16, 2003, HEATHER BECK, 36, of Cumming, Georgia, was sentenced by United States District Court Judge Thomas W. Thrash on two counts of health care fraud, and one count of filing a false tax return. Beck, who was an owner, and then president of Advanced Rehab, Inc., which specialized in providing customized wheelchairs and related medical equipment, to persons in need, including handicapped children, defrauded Medicaid by concealing the payments she received from private
insurance. Beck was sentenced to 4 years, 9 months in federal prison on the health care fraud charges, and a concurrent 3 year sentence on the tax charges. She was ordered to pay $1.44 million in restitution. The case was prosecuted by AUSA Barbara Nelan.

•On February 20, 2004, ALVIN McDOWELL, 46, a registered pharmacist who lives in Fairburn Georgia, entered a plea of guilty to a Criminal Information charging, among other things, the filing of a false federal tax return for tax year 1997. As part of the plea, McDOWELL acknowledged that his returns for tax years 1998, 1999, and 2000 were also false. He also pleaded guilty to fraudulently billing Medicaid for products that were never purchased, and dispensing drugs without prescriptions. He is scheduled to be sentenced on May 18 before United States District Judge Clarence Cooper. In the plea agreement, McDOWELL agreed to file amended returns to reflect his true income and losses that will result in his owing $228,086 in additional taxes for the aforementioned years. The case is being prosecuted by AUSA Al Kemp.

James D. Vickery, the Special Agent in Charge of the Atlanta office of the Criminal Investigations Division, said: "One of our aims is to foster confidence in the tax system and compliance with the law. Honest tax paying citizens should not have to bear the burden of someone else's tax liability. People who are thinking about cheating on their taxes should think again, as they face potential criminal prosecution."

United States Attorney Duffey affirmed the ongoing commitment to the prosecution of tax offenses: "We will seek out and prosecute those who use others and who cheat the government by abusing the tax system. Those who violate our tax laws, especially those who steal the identities of others to commit their crimes, will be prosecuted vigorously."

(NEWS MEDIA NOTE: Related interviews and quotes can be obtained by the IRS through Rodney Reynolds at 404-338-7541)

For further information please contact William S. Duffey, Jr., United States Attorney or F. Gentry Shelnutt, Chief, Criminal Division, through Patrick Crosby, Public Affairs Officer, U.S. Attorney's Office, at (404) 581-6016. The Internet address for the HomePage for the U.S. Attorney's Office for the Northern District of Georgia is
www.usdoj.gov/usao/gan.