Cross References
- El-Bey, 7th Circuit Court of Appeals, November 1, 2017

A defendant in a tax fraud case filed a total of six fiduciary tax returns each seeking a $300,000 refund. Each return was essentially identical claiming $900,000 in trust income, $900,000 in fees, $7,590 in exemptions, and $300,000 in withholding. The defendant signed each return, identifying himself as the fiduciary of the trust, and listed his date of birth as the date of trust creation. The defendant mailed three returns in the same envelope to the IRS in August 2009.

The IRS flagged these returns as frivolously filed and mailed three letters to the defendant informing him he would be assessed a $5,000 penalty per return if he failed to file a corrected return within twenty days.

In November 2009, the defendant returned the three letters by mail to the IRS and included various vouchers and tax forms bearing no relation to the returns. The defendant filed the fourth identical tax return in December 2009. Based on this return, the IRS issued and mailed a $300,000 refund check, of which the defendant deposited into his bank account. The defendant then used the funds for personal expenses including the purchase of two vehicles and to buy a house.

The defendant filed a fifth identical return in May 2010. Again, the IRS issued and mailed a $300,000 refund check, of which the defendant deposited into his bank account. This time he used the funds to purchase five vehicles. Finally, in November 2010, the defendant filed the sixth return, but the IRS did not issue a refund.

IRS criminal investigators interviewed the defendant, and he admitted he signed and filed the returns and received and deposited the checks. The defendant did not explain how he came up with the numbers on the return and refused to answer questions regarding the $300,000 withholding amounts on each return. Eventually he admitted he had not received $900,000 each year as the Trust fiduciary. He was indicted on two counts of mail fraud and six counts of making false claims to the IRS.

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