PRESCOTT — Officials say 11 inmates at a Camp Verde jail are facing criminal charges for participating in a scheme to defraud the U.S. government out of thousands of dollars while still behind bars.
The Daily Courier quotes Yavapai County Sheriff Scott Mascher as saying the scheme was stopped after workers in the jail’s mailroom noticed unusual amounts of mail to and from the Internal Revenue Service.
Authorities say the scheme was aimed at using the identities of other prisoners to file tax returns requesting unwarranted refunds from the IRS.
The plan was for inmates whose identities had been used to kick back to two alleged scheme organizers about $1,000 of the refund money they received. The refunds would have been placed on untraceable debit cards.
The inmates who have been accused in the scheme face charges ranging from conspiracy to fraudulent schemes.
Authorities say the scheme was led by inmates Justin Eugene Shaw Young, 27, and Edward Borboa, 47.
Borboa is alleged to have explained to Young how the scheme worked. Young is accused of running the scheme and attempting to file 60 bogus tax returns asking for over $300,000 in refunds.
Investigators say the inmates believed they would be able to legitimately claim they had done nothing wrong if caught, because Young had filled out and signed the tax returns for them.
Authorities searching Young’s records say they found he had handwritten detailed instructions on how the scheme was to be run, spreadsheets with fake business information and numerous people’s names and Social Security numbers.
A report issued in December by the U.S. Treasury Inspector General for Tax Administration said these types of tax fraud schemes run by prisoners has gone up sharply in the last few years, from prisoners claiming $166 million in fraudulent tax returns in 2007 to $757 million in 2010, the last year for which data is available.
The IRS stopped most of those refunds from being paid, but prisoners still got ahold of $35 million in 2010.