Former Detroit Resident Pleads Guilty to Operating Fraudulent Federal Income Tax Refund Scheme

Recently, it was announced by U.S. Attorney for the District of Connecticut that 36-year-old Kenya Malcolm, a former resident of Detroit who now resides in Surprise, AZ, pleaded guilty to operating a fraudulent federal income tax refund scheme. accounting-work-911459-m

According to the press release, Malcolm, along with co-defendants Bernard Brantley, Charles Ross, and others, conspired to file fraudulent federal income tax returns with the IRS using the names of other individuals without their knowledge. These accusations were supported by statements made in court and court documents during late 2012 through May of 2013.

Malcolm, who at one time resided in Detroit, operated “Biggest Refund Taxes,” a business based in Arizona in which Malcolm claimed to be a CPA, or certified public accountant. The scheme involved Malcolm paying Charles Ross to recruit clients for her tax preparation business. After recruiting new clients, Ross contacted Bernard Brantley, offering him a portion of his own earning for recruiting clients if Brantley would himself recruit clients for Biggest Refund Taxes. Ross is a resident of Surprise, AZ and Brantley a resident of Waterbury, CT.

The release goes on to say that Brantley and others he hired would contact innocent victims claiming that those individuals were eligible for government funding, thereby collecting their personal information including social security numbers, date of birth, and other data that could be used by Malcolm in filing fraudulent tax returns. Ultimately, both Ross and Malcolm were aware that Brantley was recruiting innocent victims under false pretenses in order to obtain their personal identity information.

After obtaining the information provided by Ross and Brantley, Malcolm used it to file fraudulent tax returns with the IRS that resulted in sizeable tax refunds. Once the refunds were received, she directed a portion to herself, a portion to Brantley and Ross, and a portion to those whose personal information was used, usually in the form of a prepaid debit card.

In all, the IRS generated more than $1 million in refunds, although the total sought through false tax returns by Malcolm was approximately $2.5 million. She pleaded guilty to one count of conspiracy, a charge which carries a maximum prison term of five years. Malcolm’s sentencing hearing is scheduled for June 4 of this year before U.S. District Judge Jeffrey Alker Meyer.

The fraudulent income tax return scheme is under investigation by the U.S. Postal Inspection Service and the IRS – Criminal Investigation Division. Brantley and Ross are scheduled for sentencing in May after both pleaded guilty to charges.

Michigan white collar crime attorneys know that even in the case of non-violent offenses, defendants face serious and often life-changing consequences, as well as loss of their freedom.

If you have been charged with tax fraud or any financial crime or are under investigation, do not hesitate before consulting with an experienced Michigan criminal defense lawyer who will work vigorously to protect your legal rights and freedom.