Approximately 964 false claims were made on behalf of people living in Northeast Ohio
CLEVELAND -- An Atlanta-area woman was charged in a two-count criminal information for operating a $4.8 million fraud conspiracy involving nearly 1,000 people who resided in Northeast Ohio, said U.S. Attorney Steven M. Dettelbach and Kathy Enstrom, IRS-Criminal Investigation Special Agent in Charge.
Zinara M. Highsmith, 35, of Fayetteville, Georgia, was charged with one count of conspiracy to commit wire fraud and one count of wire fraud. She is accused of filing approximately 2,750 false tax returns containing false refund claims of more than $4.8 million.
Approximately 964 false claims were made on behalf of people living in Northeast Ohio, resulting in false claims of nearly $1.7 million, according to the information.
"This defendant took advantage of programs designed to give people a hand up and instead used them to make herself rich," Dettelbach said.
"The American tax system is designed to provide vital government services to our people. It is not a slush fund for thieves and fraudsters," Enstrom said. "IRS will vigorously pursue those who illegally target our nation's tax dollars for personal financial gain."
Highsmith formed the Atlanta-based tax-preparation business WE XL LLC in 2010.
From March 2011 through July 2011, Highsmith partnered with a minister in Arkansas – identified in the charges only as Minister ADM – in a scheme to file false tax returns.
Minister ADM's role in the scheme was to recruit and obtain personal identification information from claimants and to provide that information to Highsmith, who was responsible for the preparation of the false returns. Minister ADM did this in large part by inducing other ministers and church leaders in various states, including Ohio, to solicit members of their congregations to apply for benefits under the so-called government stimulus program, according to the information.
Some of the claimants were residents of Northeast Ohio who provided their personal identification information to a pastor in Canton, Ohio, and to a relative of the Canton pastor. They, in turn, forwarded the information to Minister ADM, according to the information.
As instructed by Minister ADM, the claimants were told they could receive their "stimulus" payment by direct deposit or on a debit card. ADM told pastors to request a $50 "donation" from each claimant, according to the information.
ADM, in turn, forwarded the claimants' personal identification information to Highsmith to use in preparing false tax returns. Highsmith never had any contact with a claimant or any of the other pastors used by ADM to recruit or enlist claimants, according to the information.
Highsmith instructed associates how to prepare false income tax returns using Turbo Tax software, which they did by reporting false occupations and wage income, and by falsely claiming a variety of tax credits, including the AOC Education Credit, the Making Work Pay Credit and the Earned Income Credit, according to the information.
All of the returns requested that $125 be deposited into a bank account controlled by ADM and $275 be deposited into a bank account controlled by Highsmith, according to the information.
Based on the false claims, the IRS issued refunds totaling more than $3.9 million, with more than $500,000 from those refunds going to bank accounts controlled by Highsmith, according to the information.