NEW YORK – A Food and Drug Administration employee, a former New York City corrections officer, and former Internal Revenue Service employee were charged with a multimillion dollar tax refund conspiracy, officials announced last week.
The false refund claims filed with the IRS and listed in the indictment total more than $3.4 million.
Charged in a 20-count indictment are the following defendants:
Rodney Chestnut, of Middle Island, New York, a retired New York City Department of Corrections officer
Clive Henry, a former IRS employee in the business of preparing tax returns
Nafeesah Hines, a former U.S. Food and Drug Administration (FDA) employee, both of Jamaica, New York.
Chestnut and Henry were arrested last week and appeared in federal court in Brooklyn, New York.
Three New York residents were indicted in New York for defrauding the U.S. government by filing false claims for millions in false tax refunds, the Justice Department and Internal Revenue Service (IRS) announced today.
The defendants are each charged with one count of conspiracy to defraud the United States, 11 counts of assisting preparation of false returns and four counts of filing false tax returns.
Hines and Chestnut are each charged with one additional count of filing false tax returns.
If convicted, the defendants each face up to five years in prison for conspiracy and up to three years in prison for each false return charged against them.
According to the indictment, these are the facts and circumstances surrounding this case:
- Between 2008 and 2012, Hines, Chestnut and Henry recruited clients to a scheme using fake IRS Forms 1099-Original Issue Discount or OID claiming fictitious tax withholdings and were attached to tax returns that falsely claimed refunds of taxes that were never paid to the IRS.
- Hines used an electronic system to transmit the false Forms 1099-OID to the IRS.
- The false refund claims listed in the indictment total more than $3.4 million.
- The defendants collected fees based on a percentage the false refunds that they claimed as part of the scheme.
- The defendants are also charged with filing false income tax returns for themselves as part of the scheme.
- In 2013, a federal court permanently barred Hines and Chestnut from promoting an alleged tax fraud scheme involving thousands of false tax returns and from preparing tax returns for anyone other than themselves.
All defendants are presumed innocent until proven guilty.