Continued to File Fraudulent Tax Returns After Her IRS E-Filing Privileges were Revoked
Lenore Gail Worthy, 53, of Accokeek, Maryland, pleaded guilty to conspiracy to defraud the United States and to assisting in the preparation and filing of false tax returns.
The guilty plea was announced by Acting United States Attorney for the District of Maryland Jonathan F. Lenzner; Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division; and Acting Special Agent in Charge Darrell Waldon of the Internal Revenue Service – Criminal Investigation, Washington, D.C. Field Office.
According to Worthy’s plea agreement, Worthy obtained electronic tax return filing privileges from the Internal Revenue System (IRS). Worthy subsequently agreed to allow co-conspirator 1, who was not eligible to for admission into the IRS’s e-filing program due to a conviction for wire fraud, to use Worthy’s unique electronic filing identifiers, in exchange for a fee of $29 per tax return. Beginning in 2012, Worthy and co-conspirator 1 agreed to operate a business that would allow co-conspirator 1 to misrepresent his/her identity on the clients’ tax returns by using Worthy’s identifiers to prepare and electronically file fraudulent client tax returns with the IRS. In August 2015, the IRS expelled Worthy from its electronic tax return filing program due to a criminal investigation into fraudulent tax returns filed with her unique identifiers. At that time co-conspirator 3, who was also participating in the IRS’s electronic tax return filing program, agreed to allow Worthy and co-conspirator 1 to use co-conspirator 3’s unique identifiers in exchange for the use of Worthy and co-conspirator 1’s shared office space in Temple Hills, Maryland.
Worthy and co-conspirator 1 misrepresented their identities on their clients’ tax returns by using co-conspirator 3’s identifiers to prepare and electronically file the tax returns with the IRS. Co-conspirator 3 also joined in Worthy and co-conspirator 1’s practice of falsifying tax returns and fraudulently claiming refunds. Specifically, Worthy and her co-conspirators falsified tax returns by: fabricating, inflating, and improperly claiming deductions on the Schedules A that were attached to clients’ federal individual income tax returns; and engineering business losses by fabricating, inflating, and improperly claiming purported business expenses. As a result, Worthy, co-conspirator 1, and co-conspirator 3 artificially lowered their clients’ taxable income, thereby lowering the taxes that the clients owed to the IRS and inflating their refunds.
On December 15, 2017, co-conspirator 3 was also expelled from the IRS’s electronic tax return filing program due to a criminal investigation into fraudulent tax returns filed using co-co-conspirator 3’s unique identifiers. Co-conspirator 3 then misled a third-party electronic return originator (“ERO”) about the criminal nature of her issues with the IRS in order to obtain their assistance. The ERO allowed co-conspirator 3 to file tax returns using its unique identifiers, which co-conspirator 3 shared with Worthy and co-conspirator 1. Using the ERO’s identifiers, Worthy and her co-conspirators continued to prepare and file fraudulent federal tax returns through at least April 2019.
In total, the tax loss caused to the IRS as a direct result of Worthy and her co-conspirators’ conspiracy for the tax years 2012 through 2018 was $189,748. As part of her plea agreement, Worthy will be required to pay restitution in the full amount of the loss, which the parties stipulate is at least $189,748.
Worthy faces a maximum sentence of five years in federal prison for the conspiracy and three years in federal prison for aiding and assisting in the preparation and filing of false tax returns. U.S. District Judge Paul W. Grimm has scheduled sentencing for August 20, 2021 at 1:00 p.m.
Acting United States Attorney Jonathan F. Lenzner commended the IRS-Criminal Investigation for its work in the investigation. Mr. Lenzner thanked Assistant U.S. Attorney Leah Grossi and Trial Attorney Kathryn Sparks of the Tax Division, who are prosecuting the case.
