July 22, 2005
MARY’S COUNTY TAX RETURN PREPARER SENTENCED
FOR PREPARING FALSE RETURNS
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
Adams had earlier pled guilty before Judge Kaminetz to having
prepared dozens of false returns between 2002 and 2004 for 15
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.