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Saturday, June 20, 2015

DOJ ANNOUNCES GUILTY PLEA IN $228 MILLION TAX REFUND FRAUD CASE

FROM:  U.S. JUSTICE DEPARTMENT
Friday, June 19, 2015
Operator of O.I.D. Process Pleads Guilty for Involvement in $228 Million Fraudulent Tax Refund Scheme

A California man pleaded guilty yesterday to one count of conspiracy to submit false claims, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Melinda Haag of the Northern District of California.

According to the plea agreement, Duffy R. Dashner, aka Kevin Dashner, 42, of Reseda, California, and his co-conspirators, including Mark R. Maness, operated a business called O.I.D. Process through which they helped others to prepare and file individual federal income tax returns that claimed false Original Issue Discount (OID) interest income and federal tax withholdings, resulting in fraudulent claims for tax refunds (OID returns).  Dashner and Maness charged clients of O.I.D. Process a non-refundable registration fee to join the organization, and a 20 percent “refund acquisition fee” for any refund check issued by the Internal Revenue Service (IRS).  Dashner and Maness also operated a website and conducted weekly conference calls with clients to promote their business and to assist clients in preparing and filing OID returns.

Dashner and Maness required clients of O.I.D. Process to change their mailing address with the IRS to the address of another co-conspirator who was an attorney in San Francisco.  As a result, all correspondence from the IRS to the clients and the clients’ OID refund checks were sent to the attorney’s address rather than the clients’ home address.  By receiving the refund checks, Dashner and Maness were able to ensure that they received their 20 percent refund acquisition fee.  O.I.D. Process clients filed approximately 200 fraudulent OID returns claiming refunds that totaled approximately $228 million.

Dashner’s sentencing hearing is scheduled for Oct. 2 in San Francisco before U.S. District Judge Susan Illston of the Northern District of California.  The statutory maximum sentence for conspiracy to submit false claims is 10 years in prison and a $250,000 fine.  Maness previously pleaded guilty to conspiracy to submit false claims against the United States and was sentenced in February 2015 to serve 41 months in prison, and ordered to pay $1,176,668 in restitution to the IRS.

Acting Assistant Attorney General Ciraolo and U.S. Attorney Haag commended the special agents of IRS–Criminal Investigation, who investigated the case, and Trial Attorney Matthew J. Kluge of the Tax Division and Assistant U.S. Attorney Michael G. Pitman of the Northern District of California, who are prosecuting this case.