James L. Santelle, United States Attorney for the Eastern District of Wisconsin, announced that two Milwaukee women, Roshunda Smith (age: 34) and Linda Fay Townsend (age: 46) pleaded guilty to conspiring to file fraudulent claims for federal income tax refunds. Both had been charged in a 10-count indictment previously filed in the case.

During the period from February 2009 through October 2009, Smith and Townsend fraudulently sought tax refunds by filing returns for friends, relatives, and other third parties that reflected false employment, income, dependents, tax withholdings, and estimated tax payment information. Many of the returns also falsely claimed that the taxpayer was eligible for the First Time Home Buyer Credit. Smith and Townsend recruited individuals in whose names false tax returns could be filed, as well as individuals to provide bank accounts into which fraudulent tax refunds could be deposited.

As part of their scheme, Smith and / or Townsend filed more than 170 fraudulent income tax returns seeking more than $1.5 million in federal income tax refunds. While the IRS detected many of the false returns before refunds were issued, refunds totaling more than $450,000 were paid out.

Based on their guilty pleas, Smith and Townsend each face up to ten years in prison and fines of up to $250,000. Townsend’s sentencing is scheduled for February 24, 2012; Smith is scheduled to be sentenced on February 29, 2012.

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