A Georgia man and former St. Croix woman were convicted Monday of tax fraud for filing hundreds of false federal returns for hundreds of V.I. residents, according to the U.S. Department of Justice.
After a four-day trial, a federal jury found Vernon Roberts, 52, of Conyers, Ga., guilty of conspiracy to defraud the United States, and eight counts of aiding or assisting the preparation of false tax returns.
Roberts electronically filed hundreds of false personal income tax returns with the U.S. Internal Revenue Service for territorial residents, according to a U.S. Justice Department statement. He provided false Georgia addresses, false income amounts, and other false information in order to make them appear eligible to claim over $500,000 in Earned Income Tax Credits and other refunds between 2004 and 2007.
Guillermina Carmona, 38, a Frederiksted resident who recently moved to Kissimmee, Fla., pleaded guilty to one count of conspiracy to defraud the U.S. as part of a plea agreement and cooperated with the prosecution, according to the Justice Department. Georgia resident Gregory Shepherd similarly pleaded guilty to one charge and also testified against Brown.
According to U.S. Attorney Sally Yates, Roberts, acting as the head of "PC Tax Service," hired Carmona in 2004 to funnel V.I. clients to him. For the next several years, Roberts, Carmona and others would create fictitious Georgia residences for these Virgin Islanders, making them eligible to file for Earned Income Tax Credits from the United States.
Territorial residents pay to and file with the V.I. government, not the federal government, so the fake stateside addresses were necessary to deceive the IRS into processing the returns and cut checks.
After Roberts e-filed the fraudulent returns each tax season, the co-conspirators used the HSBC Bank refund anticipation loan process to get refunds to the clients within two weeks of filing. The refunds were as much as $6,000 per return. Before distributing the refunds to the clients, Roberts deducted fees of as much as $950 for each return, using a portion for salaries and commissions to Carmona and others and pocketing the rest. The group mailed the Georgia tax return checks to Carmona in St. Croix, where she distributed them to the clients. Over four years, the returns fraudulently claimed $560,000 in refunds from the U.S. Treasury.
There is no suggestion those V.I. residents who had false returns filed knew about the scheme, and no charges are currently pending against them, a U.S. Justice Department spokesman said Monday, speaking for background. From the perspective of the U.S. Justice Department, the case is about a Georgia tax-fraud scheme.
“Georgia ranks fifth in the nation in the filing of false returns to obtain fraudulent refunds," Atlanta IRS criminal investigator Reginael McDaniel said in the Justice Department statement. "Today’s conviction is a step forward in reducing that number. Return preparer fraud is a priority for IRS Criminal Investigation, and we have committed many resources to investigating and prosecuting cases just like this one. Taxpayers should be very selective in choosing a return preparer and have confidence knowing that person will prepare accurate tax returns.”
Carmona faces up to five years in federal prison and $250,000 in fines. Her sentencing is scheduled for Dec. 1. Roberts faces that plus three years in federal prison and $250,000 for each of the eight charges of assisting in preparing false tax returns. His sentencing is not scheduled yet.
All the conspirators may also have to pay back more than $400,000 to the U.S. Treasury.
