Monday, January 21, 2013

Inmate cheats IRS out of $2.8M in refunds


The Atlanta Journal-Constitution

Federal prosecutors said Wednesday a Marietta man cheated the Internal Revenue Service out of $2.8 million in tax refunds by filing false returns from state prison.

Arnold Tobias Gervais, 34, admitted in U.S. District Court that he’d hoped to get more than $3.4 million in federal tax refunds before his scheme of claiming wages and withholdings from a fictitious company unraveled, the U.S. Attorney’s Office said in a release.

Prosecutors said Gervais was in state prison in 2009 serving time for trying to get more than $600,000 in state income tax refunds illegally when he had his wife file a 2008 return to get more than $800,000 in federal refunds illegally.

Gervais also filed fraudulent returns for 2004, 2005, 2006, 2007, and 2009, and he filed another one for 2009 for an acquaintance. He claimed false wages and federal tax withholdings from a fictitious Rome, Ga., company called “Safety Shoes & More Inc.”

Prosecutors said Gervais sought refunds of more than $3.4 million, and was able to persuade the IRS to refund him $2.8 million. The agency, however, was able to recover $2.2 million from accounts Gervais controlled.

The 34-year-old man, who pleaded guilty Wednesday to filing false claims for income tax refunds, could receive up to five years in federal prison and a fine of up to $250,000.

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