ST. MARY’S COUNTY TAX RETURN PREPARER SENTENCED FOR PREPARING FALSE RETURNS

Attorney General J. Joseph Curran, Jr. announced today the sentencing of Joanne Adams, a Lexington Park tax return preparer, on her earlier conviction of preparing false State income tax returns. Adams, 58, was sentenced by St. Mary’s Circuit Court Judge Marvin S. Kaminetz to five years with all but one year suspended, which he recommended be served on home detention. Adams also must serve five years’ probation and was fined $2,000, suspended on condition she follow all the rules of her probation.

Adams had earlier pled guilty before Judge Kaminetz to having prepared dozens of false returns between 2002 and 2004 for 15 clients, as well as for three individuals posing as taxpayers who were working undercover for the Maryland Comptroller’s Office.

Although most of Adams’ clients were from St. Mary’s County, some came from as far away as Frederick County, drawn by word-of-mouth reports of the large refunds she engineered for her customers. The refunds were generally in the $3,000 to $5,000 range, and even larger for the corresponding federal refunds. Adams told customers that she used to work for the IRS, which was not true, and that as a result she knew of ways to get more money back than other preparers. Adams’ “secret” to obtaining the large refunds was to claim expenses and losses for non-existent businesses which she made up for each client.

Before it uncovered Adams’ scheme, the Comptroller’s Office paid out over $900,000 in refunds based on 570 fraudulent returns it ultimately identified as having been prepared by her in the last four years. On just the 33 fraudulent State returns Adams prepared for the 15 people covered by the charges, the State paid out over $42,400 in refunds. Each of the 570 returns identified as fraudulent have been audited by the Comptroller, and the refunds disallowed. In addition, the taxpayers involved have been assessed penalties and interest totaling $1,467,516.

The case was investigated by the Field Enforcement Division of the State Comptroller’s Office, working jointly with the Attorney General’s Criminal Investigations Division and the Maryland State Police.
 

#