North Carolina Tax Preparer Sentenced to More Than Ten Years in Prison for Conspiracy to Defraud the IRS
Owner of Herb's Helping Hands in Rockingham, NC prepared and filed federal income tax returns that fraudulently claimed refunds for clients
A North Carolina man who owned a tax preparation business was sentenced in federal court to serve 11 years in prison for conspiring to defraud the Internal Revenue Service (IRS) and assisting in the preparation of fraudulent tax returns.
According to documents filed with the court, from at least January 2012 through April 2016, Herbert Lee Martin owned and operated a tax preparation business in Rockingham, NC known as "Herb's Helping Hands," where he prepared and filed federal income tax returns that fraudulently claimed refunds for clients. Martin also taught others how to prepare false returns and supervised their preparation of these returns.
Court documents show that Martin and his co-conspirators reported fictitious or inflated income and dependency exemptions to generate false or inflated Earned Income Tax Credits, false business income, and losses, and false deductions. On occasion, Martin and his co-conspirators purchased, and sometimes stole, personal identifying information of individuals, including minor children, and listed these individuals as false dependents on returns to generate larger fraudulent refunds for their clients. Martin also directed some of the clients' refunds into his own bank account or a bank account he controlled.
"Herbert Martin used his business – Herbs Helping Hands – to literally help himself to false and fraudulent deductions and tax credits, which he then sprinkled on his clients' returns even though he knew they were not eligible to claim them," said Acting Deputy Assistant Attorney General of the U.S. Justice Department's Tax Division Stuart M. Goldberg. "The bogus returns his business created caused more than $10.6 million in losses for the U.S. Treasury. Martin's 11-year sentence is a stern warning to those engaged in preparing fraudulent tax returns that they will be identified and held fully accountable for their criminal conduct."
"Martin constructed an elaborate scheme to defraud the federal government that resulted in the loss of millions of dollars in tax revenue," said Acting U.S. Attorney for the Middle District of North Carolina Sandra J. Hairston. "With the sentence that was imposed today, Martin has been brought to justice for his crimes."
"Let this be a reminder to others seeking to enrich themselves illegally—IRS CI Special Agents and their law enforcement partners will find you; we will uncover your fraudulent schemes," said Chief Richard Weber of IRS Criminal Investigations (CI).
In addition to the term of prison imposed, Martin was ordered to serve three years of supervised release and to pay $10,605,420 in restitution to the IRS.
On May 9, Martin's niece, Jessica Shanice Taylor, was sentenced to serve 24 months in prison for aggravated identity theft, which she committed as part of Martin's scheme. She also was ordered to pay $36,569 in restitution to the IRS.
Additional information about the Tax Division and its enforcement efforts may be found on the division's website.