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$2.5 Million Tax Fraud Ring Conviction Leads to 5 Year Prison Sentence

$2.5 Million Tax Fraud Ring Conviction Leads to 5 Year Prison SentenceOn October 15th, 53-year-old Teresa Floyd received a harsh sentence from a Montgomery Alabama Court as a result of her participation in a multimillion dollar tax fraud ring. According to press reports, Floyd and Lasondra Davis, her daughter, operated multiple tax preparation businesses between 2011 and 2014 and filed over 900 federal tax returns falsely to generate approximately $2.5 million in refunds.

Several months ago, Floyd pled guilty in court to aggravated identify theft and conspiracy to defraud, and the court sentenced her to a 5 year sentence followed by three years of supervised release and ordered her to pay $734,000 in restitution to the IRS.
Floyd and her daughter, per the indictment, created false identities, which Floyd then used to file the false returns. They then cashed the refund checks they obtained from multiple companies set up in the Georgia and Alabama regions.
Davis, for her part, received a sentence on September 1, which included a two year stint in jail, a one year probationary release, and a fine of $1,941.
The Internal Revenue Service has cataloged hundreds of tax fraud types, including:

  • Creating tax structures designed to abuse the law and illegally reduce tax liabilities;
  • Creating multiple sets of books or engaging in other illegal “creative” accounting practices;
  • Maximizing refunds by inflating expenses or creating false records;
  • Putting money in special accounts offshore without reporting on these accounts properly or paying fair taxes on them.
  • Abusing the rules of trusts;
  • Claiming charitable donations that were never actually made;

Accused of Tax Fraud? Important Questions That Must Be Answered

When the government calls corporations to task for complex and inappropriate financial behavior, the consequences can be diverse and hard to predict. For instance, will executives or other participants in the alleged misconduct go to prison? What will happen to a company and its employees if an SEC investigation results in the effective decimation of the leadership ranks? How much information about tax fraud allegations does a company need to disclose and under what circumstances? What is the proper role of in-house counsel during various phases of an ongoing IRS investigation? What structures and systems can a company put into place to prevent getting embroiled in future disruptive investigations?
Experienced corporate tax fraud defense attorneys, like J. Patrick Quillian, can provide critical insight to help you and your team weather the storm of complex fraud allegations, comply with all relevant obligations and regulations, and obtain a fair and just result. Please call or email our offices to get a handle on the nature of the tax-related challenges your corporation faces and develop a strategic plan.

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