Three Florida men pleaded guilty Tuesday to defrauding the government of millions of dollars through fraudulent tax refund schemes, according to the Department of Justice (DOJ).
Christopher Johnson of Orlando and Jacen Harvey of Tampa pleaded guilty to conspiring to defraud the United States in furtherance of a tax evasion scheme known as the “Note Program.” Arthur Grimes of Florida also pleaded guilty April 2 to obstructing the Internal Revenue Service in connection with the same scheme, according to the release. Department of Justice press release.
WASHINGTON, DC – APRIL 15: The Internal Revenue Service (IRS) building in Washington, DC on April 15, 2019. April 15 is the deadline for U.S. residents to file their income tax returns. (Photo by Zach Gibson/Getty Images)
Between 2015 and 2018, Johnson and Harvey orchestrated a scheme to obtain large refunds from the IRS by falsely withholding large amounts of tax on tax returns. The fraudulent returns prepared by Harvey and others claimed millions of dollars in refunds. In return for their services, the conspirators charged clients fees and received a cut of the fraudulent refunds, the press release stated.
The scope of the scheme was extensive, with fraudulent refund claims totaling more than $3 million. The IRS spent approximately $1.5 million on the scheme before it was discovered. Grimes played a key role in filing four false tax returns prepared by Harvey. When the IRS sought to collect refunds owed to Grimes, Grimes obstructed the investigation by submitting false statements and documents to IRS tax officials and transferring funds to bank accounts in their names, the press release explained. (Related story: Biden's IRS launches audit of conservative organization that helped defeat nominees for key administration posts)
Johnson received more than $200,000 in fraudulent refunds in 2016 and more than $100,000 in 2017. According to the press release, Johnson and Harvey both face up to five years in prison for their roles in the conspiracy and have not yet set a sentencing date. Grimes, who is scheduled to be sentenced on Nov. 12, could face up to three years in prison for obstructing the IRS.
In addition to possible prison time, the three could also face probation, restitution and fines.
