Three El Dorado County women have been indicted in a nationwide a $60 million fraudulent tax refund scheme.
In an indictment unsealed today in U.S. District Court in Sacramento, Teresa Marie Marty of Pollock Pines, Rebecca Bandera-Marty of Shingle Springs and Pamela Harris of Placerville were charged with conspiring to defraud the United States, according to a federal Department of Justice news release. In addition to the conspiracy count, Marty is charged with 33 counts and Bandera-Marty with 16 counts of false claims against the United States.
According to the indictment, in 2008 and 2009, the three women conspired to defraud the United States by filing at least 250 false individual federal income tax returns, claiming more than $60 million in false federal income tax refunds for clients in 26 states. In response to the false returns, the IRS erroneously issued more than 40 tax refunds, totaling more than $8 million, including refund for $277,832 for Marty's own tax return.
The indictment alleges that the defendants operated the fraudulent scheme through Marty's tax preparation business, Advanced Financial Services, in Placerville. Marty and her daughter-in-law Bandera-Marty were licensed tax preparers and Harris was the firm's office manager.
The defendants are accused of recruiting clients by claiming that they could eliminate their debts and legally receive sizable tax refunds. They allegedly billed and collected fees of as much as $6,000 for the service.
The defendants allegedly prepared the false tax returns claiming large refunds based on fictitious Forms 1099-OID. Authorities said the fraudulent forms falsely reported that a client's total outstanding debt - such as mortgage, credit limits on credit cards, student loans and auto loans - was interest income the client had received from the lender that had been withheld by the IRS, and therefore, the client was entitled to a refund.
In March 2010, a federal judge in Sacramento permanently barred Marty and Advanced Financial Services from acting as federal tax return preparers in response to a lawsuit filed by the Justice Department's Tax Division.