PHOENIX – Donald Eugene Reed III, 23, of Phoenix, Ariz., was sentenced by U.S. District Court Judge G. Murray Snow to eighteen months’ imprisonment followed by three years of supervised release. Reed had previously pleaded guilty to theft of public money. The defendant was ordered to pay restitution to the government in the amount of $415,969.
According to his plea agreement, Reed admitted to preparing and filing at least 104 fraudulent tax returns with the Internal Revenue Service during the years 2012 to 2015. Reed’s fraudulent tax returns claimed approximately $677,716 in false refunds and caused the IRS to issue approximately $415,969 in false refunds.
To carry out the scheme, Reed prepared and filed fraudulent tax returns using approximately 81 individuals’ names and personally identifying information. To increase the amount of the false refund, Reed routinely falsified information in the tax returns regarding the wages purportedly earned by the individuals, the federal taxes withheld from the individuals’ wages, and/or the individuals’ dependents. Reed diverted the false refunds to himself through a variety of methods, including by directing them to his own bank accounts and other bank accounts he controlled or by requesting the false refunds be issued on pre-paid debit cards that were sent to him.
“Individuals committing tax-related identity theft may think it is a victimless, white-collar crime when they are actually stealing from all the hard-working taxpayers in our country. Special Agents with IRS-CI will continue to make tax–related identity theft one of our top priorities” stated IRS-Criminal Investigation Special Agent in Charge Ismael Nevarez Jr.
