U.S. Department of Justice
United States Attorney
Southern District of Mississippi
188 East Capitol Street
Suite 500
Jackson, Mississippi 39201-0101
Telephone 601-965-4480
Facsimile 601-965-4409

FOR IMMEDIATE RELEASE
MARCH 3, 2004

GULFPORT RETURN PREPARER GUILTY IN FEDERAL INCOME TAX CASE

DUNN LAMPTON, United States Attorney for the Southern District of Mississippi, and MICHAEL J. NELSON, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation, announced that RAYSHA HARVEY CALLAHAN, of Gulfport, Mississippi, pleaded guilty today to presenting false claims for payment of federal income tax refunds based on fraudulent tax returns she prepared for taxpayers. CALLAHAN entered her guilty plea earlier today before United States United States District Judge Walter J. Gex, III, in federal district court in Gulfport, Mississippi.

In January 2004, CALLAHAN was charged with 24 counts of presenting false claims for payment of tax refunds based on fraudulent federal income tax returns she prepared for taxpayers during calendar year 2002. The tax refund claims listed in the felony information total $93,716.00 and range in amounts from $495.00 to $5,536.00.

During the plea proceedings today, the prosecutor said CALLAHAN prepared the returns while serving as a tax return preparer with Fast Tax Service in Gulfport. In the course of preparing tax returns for the 2001 tax year, CALLAHAN began a practice of altering the information that was to be reflected on the returns in order to generate larger refunds than the taxpayers were entitled to receive. Among the means CALLAHAN used to increase the tax refunds were by adding false dependents, altering the taxpayers' wages, inflating the amount of federal income taxes withheld and claiming false moving expenses. Most of the returns included an Earned Income Credit and resulted in larger refunds than would otherwise have been available.

According to the prosecutor, CALLAHAN prepared a total of 199 false tax returns, for which the total tax loss was $419,340.00. In a number of instances, CALLAHAN was able to obtain the benefit of the enhanced refund amounts by cashing refund anticipation loan checks that had been issued based on the fraudulent returns. In some cases, CALLAHAN forged the taxpayer's endorsement on the checks; in other cases, she simply signed her own name.

Based on her guilty plea, CALLAHAN faces a maximum sentence of five years of imprisonment, a maximum fine of $250,000, and a period of supervised release of up to three years.
Assistant United States Attorney GAINES CLEVELAND is the prosecutor in charge of the case.

Mr. LAMPTON praised the efforts of the Internal Revenue Service, Criminal Investigation for its diligent work in the investigation of this case.