A New Jersey man was sentenced to 78 months in prison today for conspiring to defraud the United States, filing false claims, and obstructing the internal revenue laws, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division.
According to court documents and statements made in court, between 2015 and 2016, Kenneth Crawford Jr. and his co-conspirators promoted and sold a “mortgage recovery” tax fraud scheme in which they obtained fraudulent refunds from the IRS for their clients. Crawford promoted the scheme to individuals who were facing foreclosure or behind on their mortgage payments. He represented to them that they could extinguish their outstanding mortgage debts by filing tax forms with the IRS.
As part of the scheme, Crawford and his co-conspirators directed clients to file forms that fraudulently claimed that a substantial amount of taxes had already been withheld from them. These false claims caused the IRS to issue significant refunds to which the clients were not entitled. As a result of Crawford’s scheme, more than $2.5 million in fraudulent refunds were sought from the IRS, of which the IRS paid out more than $1.3 million. Crawford charged a fee of roughly 25 percent for each refund obtained.
When the IRS discovered the fraud and attempted to recover the previously issued refunds, Crawford provided clients with false documents to send to the IRS, directed clients to conceal from the IRS his role in filing the false returns, and advised clients to remove funds from bank accounts in their names in order to thwart IRS collection efforts.
On Dec. 17, 2019, a federal jury in Camden, New Jersey, convicted Crawford of conspiring to defraud the United States, filing false claims, and obstructing the internal revenue laws.
In addition to the term of imprisonment, U.S. District Judge Robert B. Kugler ordered the defendant to serve three years of supervised release and to pay approximately $1,393,511 in restitution to the United States.
Acting Deputy Assistant Attorney General Goldberg commended special agents of IRS-Criminal Investigation, who conducted the investigation, and Tax Division Trial Attorney Sean Green and Assistant Chief John Kane, who are prosecuting the case. He also thanked the U.S. Attorney’s Office for the District of New Jersey for its assistance and support during the investigation and prosecution of this case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
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Author: November 2, 2020