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Wednesday, October 8, 2014

TWO PEOPLE SENTENCED FOR FILING FALSE TAX RETURNS

FROM:  U.S. JUSTICE DEPARTMENT 
JUSTICE NEWS
Department of Justice
Office of Public Affairs
FOR IMMEDIATE RELEASE
Monday, October 6, 2014
Two Michigan Men Sentenced to Prison for Filing False Claims Against Internal Revenue Service

Two Detroit area men were sentenced today in the U.S. District Court for the Eastern District of Michigan for conspiracy and filing $3.4 million in false claims against the Internal Revenue Service (IRS), the Justice Department and IRS announced.

Jason McGuire, 38, of Detroit, was sentenced to serve 63 months in prison to be followed by three years of supervised release and to pay $1.675 million in restitution.  Delvin Davis, 37, of Saint Clair Shores, Michigan, was sentenced to serve 42 months in prison to be followed by three years of supervised release and to pay $1.146 million in restitution.

On Jan. 30, McGuire and Davis were found guilty by a jury in Detroit of conspiracy to file false claims in the form of false individual income tax returns and false trust tax returns.  The defendants were also found guilty of filing or aiding and abetting in the filing of false, fictitious and fraudulent claims; McGuire was found guilty of 18 such counts and Davis was found guilty of five counts.  Witness testimony revealed that the defendants attended the same high school in Detroit and started the scheme in 2008.  Prior to that time, McGuire had worked as a mechanic and Davis had worked as a mortgage broker and operated a credit repair business.

According to court documents and evidence introduced at trial, McGuire and Davis recruited individuals from the Detroit area with whom they had existing, long-standing business and personal relationships to sign fraudulent trust and income tax returns.  McGuire had the taxpayers sign blank trust return forms, and the taxpayers never saw the filled-out forms before they were filed.  McGuire attached bogus forms to the income tax returns.  McGuire included fictitious withholdings in both types of return forms which resulted in the taxpayers receiving large refunds.  The defendants recruited at least nine different taxpayers to participate in the fraudulent scheme.  The IRS received returns requesting more than $3.4 million in false refunds and paid more than $1.5 million in false refunds as a result of the fraudulent scheme.  Several taxpayers testified at trial that they were required to pay fines and interest to the IRS as a result of the false tax returns that the defendants submitted.

This case was investigated by special agents from IRS – Criminal Investigation and prosecuted by Assistant U.S. Attorney Elizabeth Stafford for the Eastern District of Michigan and Trial Attorney Mark McDonald of the Tax Division.