North Carolina Man Pleads Guilty of Participating in Tax Fraud Scheme
A North Carolina man pleaded guilty of promoting a nationwide tax fraud scheme and helping other conspirators file false tax returns, which took over US$64 million of fake tax refunds from the Internal Revenue Service (IRS), the Department of Justice reported on Tuesday.
Mehef Bey, also known as Arthur Daniels, of Charlotte, is accused of conspiring to defraud the U.S. by promoting a scheme for recruiting clients for whom he prepared false tax returns. Bey used to assure the clients that “their mortgages and other debts entitled them to tax refunds,” the DOJ report stated.
From 2014 to 2016, Bey organized seminars all over the U.S. where he presented the scheme. The fake tax returns claimed that banks had kept income tax from the participants of the scheme, which entitled them to refunds, while the banks actually had not paid any income to them.
To commit the fraud, Bey and other conspirators – Iran Backstrom, Aaron Aqueron and Yomarie Febres – who pleaded guilty last month, used to file tax documents with the information matching to that on the tax returns, in order for the documents to look like original bank papers.
In addition, Bey admitted that he charged his clients from $10,000 to $15,000 for preparing fees for every tax return, thus making over $1 million for his role in the scheme. However, he did not report this income in 2015 and 2016, while in 2014 he filed a fake income tax return, which didn’t include the money made from promoting the scheme.
Moreover, he admitted concealing his role in the scheme by suggesting that the tax were “self-prepared,” as well as teaching the participants to hide the scheme from the IRS.
Bey faces up to five years in jail for conspiring to defraud the U.S., and three years for each of the two counts of helping in the preparation and filing of a fake tax return. In addition, he may be punished by a period of supervised release, restitution and financial penalty.