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Tax preppers jailed years for filing bogus returns for prison inmates

The owners of a tax preparation business that filed fraudulent tax returns on behalf of inmates at various New Jersey prisons were sentenced Friday to multi-year prison sentences.

Kamal J. James, a/k/a Bro Messiah Aziz El, 34, of Seaford, Delaware, and Crystal G. Hawkins, a/k/a Sis. Crystal Gabri El, 39, of Laurel, Delaware, were sentenced to eight years and four years in prison, respectively.

They were charged with one count of conspiracy, 16 counts of making false claims, and three counts of mail fraud.

Both were convicted on all counts following a one-week trial before Judge Peter Sheridan. He sentenced them Friday in Trenton federal court.

Between October 2011 and October 2013, James and Hawkins operated Release Refunds, a tax preparation business based in New Jersey.

They solicited current and former New Jersey prison inmates as clients and then filed fraudulent tax returns on their behalf.

James and Hawkins sent Release Refunds promotional flyers to inmates at various New Jersey prisons and halfway houses offering tax return preparation services, the DOJ said.

The pair asked inmates interested in Release Refunds’ services to provide basic identification information and to sign income tax returns and other IRS documents, but not to include any information about their income or withholdings.

James and Hawkins then filled in the missing income information on the return forms. They fabricated the inmates’ earnings to trigger fraudulent and inflated refunds.

The DOJ said,

An undercover IRS-Criminal Investigation agent posing as an inmate in a New Jersey prison submitted a completed Release Refunds form and sent it to James and Hawkins. They then sent the “inmate” blank income tax forms and other IRS documents and instructions to sign the documents. James and Hawkins did not request any financial information from the undercover agent before preparing three fraudulent tax returns — including false income information that James and Hawkins provided — to be filed on behalf of the agent for tax years 2010 through 2012. The fraudulent returns resulted in several thousand dollars in refunds and a $1,485 fee for the defendants.

In addition to the prison terms, Judge Sheridan ordered James and Hawkins to pay restitution of $570,897.

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Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.

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