Four Northwest Georgia residents pleaded guilty in federal court to using stolen identities — including some from inmates in Georgia prisons — to conspire to steal $2 million by filing 595 false income tax returns.
"They claimed $2 million in false refunds, but the actual stolen amount was $473,805 -- if we're going to be exact," said Margaret Philbin, spokeswoman for the U.S. Attorney's Office, Western District of Pennsylvania.
Summerville, Ga., residents Edward Claude Hammitt, 67; Heather A. Smith, 26; Astrid P. Perry, 37; and Rome, Ga., resident Beverly J. McHenry, 57, each pleaded guilty to one count of wire fraud conspiracy before a judge in U.S. District Court in Pittsburgh, Pa.
They were part of a larger scheme to use stolen IDs to file false 2010 and 2011 federal income tax returns requesting refunds totaling nearly $2 million to be doposited into banks and credit unions in Georgia and Pittsburgh.
Treasury Department investigators realized that the electronically filed form 1040 returns fit the pattern of stolen identity refund fraud, including a common false employer, "Mohawk Inc.," common deductions, similar refund amounts claimed and common bank account information, testified Assistant U.S. Attorney Gregory C. Melucci, who's prosecuting the case.
Returns were connected to individuals who, using suspicious account names, opened accounts at banks and federal credit unions in Pittsburgh and Georgia into which the fraudulent tax refunds were deposited. For example, Heather Smith opened an account under the name, "Heather Tax and Accounting," at two Georgia banks, federal court documents show.
"It was also readily determined that many of the victim names on the returns belonged to inmates at correctional facilities in Georgia," Melucci said at one of the hearings.
Some victims were from Wheeler Correctional Facility, a 3,028-bed, medium-security prison in Alamo, Ga., a small town about three hours southeast of Atlanta. Wheeler is owned by Corrections Corporation of America, a publicly traded Nashville-based corporation that houses nearly 70,000 inmates in more than 60 facilities, including Hamilton County's Silverdale Detention Facility in Chattanooga.
CCA spokesman Steve Owen wasn't familiar with this particular case, but said IRS fraud is commonplace at prisons nationwide.
"Fraudulent filings among inmates is a common challenge for correctional facilities around the country," Owen said.
Prisoners obtain information from other inmates in a variety of ways, including trickery, he said.
Three other Northwest Georgia residents -- Darrell Jerome Ryles, Mark Williams and Roger Ladell Price Jr., all from Rome or Summerville -- face federal charges in the conspiracy, but their cases are still pending, Philbin said.
The defendants who pleaded guilty will be sentenced in late September. Federal law provides for a maximum total sentence of not more than 20 years in prison, a fine of $250,000, or both.
Contact staff writer Tim Omarzu at email@example.com or twitter.com/TimOmarzu or 423-757-6651.
Tim Omarzu covers Catoosa and Walker counties for the Times Free Press. Omarzu is a longtime journalist who has worked as a reporter and editor at daily and weekly newspapers in Michigan, Nevada and California. Stories he's covered include crime in blighted parts of metro Detroit and Reno, Nev.; environmental activists tree-sitting in California's Sierra Nevada foothills; attempts by the Michigan Militia to take over a township¹s government in northern Michigan. A native of Michigan, ...