Two Cleveland women were indicted for a conspiracy in which they stole other people’s identities and collected more than $326,000 in false tax returns, law enforcement officials said.
Named in the 43-count criminal indictment are Michelle D. Pugh, a/k/a Michelle Morman, 38, and Joi C. Tate, 37. They are charged with conspiracy to defraud the government, making false, fictitious and fraudulent claims for income tax refunds, theft of public funds and aggravated identity theft.
“This duo is charged with stealing money from the government and identifying information from customers," said Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio.
“These defendants stole identities and enriched themselves as if the IRS was their personal ATM," said Troy Stemen, Acting Special Agent-in-Charge, IRS-Criminal Investigation, Cincinnati Field Office. “Our agents remain vigilant and will continue to work with the U.S. Attorney’s Office to root out these bad actors and bring them to justice."
The indictment alleges that Pugh and Tate, acting together and with others, engaged in a false tax refund scheme in which they prepared at least 25 false income tax returns for the years 2010 and 2011, for approximately 20 people including Pugh, which claimed income tax refunds that were greater than the actual refunds, if any, to which the taxpayers were entitled.
Pugh, Tate and others gathered personal identification information used in filing the returns either by posing as legitimate tax preparers working through Pugh’s company, MP Tax Services, or through a network of associates. In some cases, Pugh and Tate obtained and used personal identification information of individuals without their knowledge of consent. Pugh and Tate did not list themselves as the actual tax preparer on any of the tax returns they filed in others’ names.
On each return, Pugh, Tate and their cohorts generated false refund claims, at least in part, by reporting a falsely inflated or fictitious wage income and a resulting false earned income credit. On some returns, Pugh, Tate and their confederates also claimed false dependents and/or reported false education and child tax credits, as reflected on fictitious Forms 8863 and 8812 filed with the IRS.
Pugh and Tate filed the returns electronically on behalf of taxpayers, through private and public internet connections. Generally, they did not provide a copy of the return to the taxpayer, and the taxpayer did not know the amount of the refund claimed or was told an incorrect amount. In the case of those individuals whose identities were used without their knowledge or permission, Pugh and Tate did not inform them that they received funds from the IRS and instead kept the proceeds for themselves.
The electronic filings included requests that the IRS direct-deposit refunds into bank accounts owned or controlled by Pugh. After receiving the refunds, Pugh, Tate and their co-conspirators paid only a portion of the refund, if any, to the taxpayer.
According to the indictment, Pugh’s, Tate’s and their co-conspirators’ falsely inflated refund claims on the returns filed in the scheme resulted in the delivery of approximately $326,265 in illicit refunds to the conspirators.
If convicted, the defendants’ sentences will be determined by the Court after review of the factors unique to this case, including the defendants’ prior criminal records, the defendants’ roles in the offense and the characteristics of the criminal conduct. In all cases, the sentences will not exceed the statutory maximum and in most cases it will be less than the maximum.
This case is being prosecuted by Assistant U.S. Attorney Om Kakani, following an investigation by the IRS - Criminal Investigations.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove the defendant guilty beyond a reasonable doubt.
Source: U.S. Department of Justice, Office of the United States Attorneys
