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Tax Evasion Scheme in Georgia Causes $25 Million in False Refund Claims
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A Georgia man has pleaded guilty to promoting a nationwide tax fraud scheme that caused more than $25 million in false refund claims to be filed with the Internal Revenue Service (IRS).
The Scheme
The main promoter of the scheme was Iran V. Backstrom, also known as Shariyf Noble, of Milledgeville, Georgia. Backstrom recruited clients and prepared false tax returns on their behalf.
How it Worked
Between 2014 and 2016, Backstrom and his co-conspirators held seminars across the country to publicize the scheme. As part of the scheme, Backstrom helped prepare and file tax returns for participants, who collectively sought more than $25 million in refunds from the IRS.
The False Claims
These tax returns falsely claimed that banks and other financial institutions had withheld large amounts of income tax from the participants. To make the refund claims appear legitimate, Backstrom and his co-conspirators filed tax documents with the IRS that matched the withholding information listed on the tax returns, making them appear as if they had been issued by the banks.
The Elaborate Scheme
The scheme was so elaborate that it even included false IRS forms designed to appear as if they were created by the participants’ financial institutions. Backstrom charged participants approximately $10,000 to $15,000 in fees for preparation of each tax return.
Backstrom’s Involvement
Backstrom admitted that he gave orders to others as part of the scheme and personally received approximately $1 million for his role in the scheme. However, he did not file tax returns for the years 2014, 2015, and 2016 to report this income.
Sentencing and Consequences
Backstrom’s sentencing has been scheduled for a later date. He faces up to five years in prison for conspiring to defraud the United States and three years in prison for each of the seven counts of aiding and assisting in the preparation and filing of a false tax return. He also faces a period of supervised release, restitution, and monetary penalties.
Investigation and Prosecution
The case was investigated by IRS-Criminal Investigation and is being prosecuted by the Justice Department’s Tax Division and the U.S. Attorney’s Office for the Middle District of Florida.