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Highest sentence on record for tax fraud gets #1 spot on the IRS Top Ten

The IRS’s Top Ten Identity Theft Prosecutions of 2015

We conclude our series on the IRS Top Ten Identity Theft Prosecutions of 2015 with the highest sentence received to date for identity theft and tax fraud.

 

Who

James Lee Cobb III

 

Where

Tampa, Florida

 

What he did

From around January 2011 through November 2013, convicted felon James Lee Cobb III and his wife Eneshia Carlyle conspired with others to obtain the personal identification information of an estimated 7,000 individuals. They filed fraudulent tax returns, claiming approximately $3 million in false tax refunds.

 

How he did it

Cobb and his wife obtained the personal identification information of 7,000 people from a number of medical institutions, including a VA Hospital, the Florida Hospital Tampa, a medical billing company and at least one out-of-state ambulance service. Cobb, his wife, and other co-conspirators filed fraudulent tax returns, claiming approximately $3 million using the stolen identities. At the time, Cobb was on supervised release from a prior federal conviction.

Police investigators found the names and social security numbers in Cobb’s home, as well as a loaded handgun and a semi-automatic AR-15-style rifle with a fully-loaded 30-round magazine.

Cobb was caught following an extensive coordinated investigation by the Internal Revenue Service, Tampa Police Department, Bureau of Alcohol, Tobacco, Firearms, and Explosives, Inspector General of the U.S. Department of Veterans Affairs and Tampa Bay Identity Theft Alliance.

 

The charges

Cobb pleaded guilty to:

 

The sentence

Cobb was sentenced to 27 years in prison, his sentence most likely increased due to the use of stolen healthcare information. Note that Cobb’s firearm charge, in and of itself, carries a sentence of up to 15 years in prison.

 

Criminal Tax and Financial Fraud Defense

Identity fraud schemes are usually accompanied by violations of other laws, which also carry substantial penalties such as extensive time in prison and significant fines. Contact the criminal tax defense attorneys at Moskowitz, LLP to learn more.

Nine women sentenced for $24 million identity theft and tax refund fraud scheme using personal identification information of military personnel

The IRS’s Top Ten Identity Theft Prosecutions of 2015

Who

Keisha Lanier, Tracy Mitchell, and seven other women

 

Where

Montgomery, Alabama

 

What they did

From around January 2011 through December 2013, Lanier and Mitchell masterminded a large-scale identity theft, tax fraud and money laundering scheme, claiming more than $24 million in fraudulent tax refunds and collecting nearly $10 million.

 

How they did it

Identity Theft - Tracy Mitchell worked at a hospital where she obtained the personal identification information of U.S. Army personnel, including soldiers stationed in Afghanistan. She and her daughter Latasha also worked together to obtain additional stolen identities from a state agency. The other co-conspirators gathered identities from other state agencies, the Alabama Department of Corrections, a call center in Columbus, Georgia and from a Georgia company’s employee records.

Tax Refund Fraud - The conspirators established sham tax businesses and obtained Electronic Filing Numbers from the IRS, as well as check stock and other products from various banks. They directed the IRS to issue tax refunds to prepaid debit cards or checks; they also printed refund checks from their blank check stock when the IRS deposited funds directly into their company bank accounts. When the banks ceased allowing them to print out tax refund checks, they hired corrupt postal employees to collect refund checks that were mailed to various addresses along their routes and to deliver those checks to them.

Money Laundering – The conspirators used text messaging to coordinate a fraudulent check cashing scheme in three states. Nearly $10 million was cashed by the conspirators and other people they recruited through the Columbus Walmart where one of the conspirators worked, and at various businesses in Georgia, Alabama and Kentucky.

 

The charges

The charges against the conspirators included:

 

The sentences

Keisha Lanier was sentenced to 15 years imprisonment plus 3 years of supervised release, and was also ordered to forfeit $5,811,406. Tracy Mitchell was sentenced to 13 years plus 3 months imprisonment (in addition, $329,242 was found in her home and seized by the government). Most of the other conspirators were sentenced to between 2 and 5 years in prison, and ordered to pay from $440,176 up to $760,512 in restitution to the IRS. Two of the co-conspirators (who appear to have been involved only in the check-cashing scheme) received lighter sentences - one year in prison or two years’ probation, and smaller restitution amounts.

 

California Criminal Tax Defense Attorneys

Victim impact statements were made at sentencing, including the mother of a soldier who was deployed at the time of the identity theft. Considering this and the magnitude of the operation, it is not surprising that the sentences were especially harsh for the ringleaders in particular. If you are being investigated for tax refund fraud or other financial crime against the government, you need to be represented by a highly qualified criminal tax attorney. Contact the San Francisco offices of Moskowitz, LLP today.