South Bend, Indiana - The United States Attorney’s Office announced the following activity in Federal Court:
Jonathan Parahams, Jr., 28, of South Bend, Indiana was sentenced to 92 months imprisonment, 3 years supervised release and to pay $2,572,350.52 in restitution after pleading guilty to the felony offense of conspiracy to defraud the United States Department of the Treasury.According to documents filed in this case, Parahams was arrested at a local hotel by SBPD on drug and gun charges. During this arrest, officers found a laptop computer in his hotel room.After his arrest, a local bank contacted the DEA with information about unusual activity on bank accounts associated with Parahams, including the withdrawing $450,000.00.A search warrant was procured for Parahams’ laptop and the search uncovered information relating to the tax scheme.
Since at least the beginning of 2009, Parahams and others associated with him, participated in a scheme to defraud by submitting fraudulent U.S. Individual Income Tax Returns, using false or inflated Forms W-2.This scheme resulted in the submission of 226 false tax returns for tax year 2008, 652 false returns for tax year 2009, and 311 false returns for tax year 2010.As a result of these false returns, Parahams and others obtained refunds Internal Revenue Service, via direct deposit, into multiple bank accounts owned by the conspirators or into bank accounts owned by other account holders but controlled by Parahams. Some of these account holders knowingly assisted in disbursing refunds at the direction of Parahams and his fellow conspirators.
Parahams obtained the information to submit false returns in several ways:some clients either sold their information for a fee, others sought out members of the conspiracy to have a tax return prepared, while others were recruited by Parahams. Clients who provided their information for a fee, gave personal identifiers such as their name and social security number in exchange for cash or a prepaid debit card that later came in the mail. Those clients that sought out the conspirators to have legitimate tax return preparation after being told larger refunds could be obtained using the services ofParahams’ associates.These larger refunds wereobtained by using false Form W-2information. Other persons were recruited to file a tax return with Parahams or another conspirator in order to obtain a tax refund even though the client had no intentions or duty to file otherwise.Parahams and his coconspirators recruited clients personally and/or paid others a referral fee for referring clients.
Parahams was incarcerated in St. Joseph County Jail in August of 2010. While incarcerated, Parahams made numerous phone calls to his co-conspirators which were openly recorded by the jail as a normal course of business. These recordings showed that Parahams was still actively involved with the scheme while incarcerated.
Parahams and others started the scheme in 2009 with the submission of false 2008 tax returns. The scheme continued with the submission of 2009 tax returns and then 2010 tax returns. The last tax return identified with the scheme was filed with the Internal Revenue Service in July 2011.
This case was handled by the Office of the U.S. Attorney for the Northern District of Indiana.Frank Schaffer, Assistant U.S. Attorney.This case was the result of an investigation by the Internal Revenue Service - Criminal Investigation Department.
Source: U.S. Department of Justice, Office of the United States Attorneys
