ROANOKE, VIRGINIA -- A local husband and wife who admitted to committing fraud and stealing the identities of others were sentenced today in the United States District Court for the Western District of Virginia in Roanoke.
Michelle A. Ferguson and William J. Ferguson Jr., both of Roanoke, Va., each previously pled guilty to one count of conspiracy to commit fraud. In addition, Michelle Ferguson pled guilty to one count of aggravated identity theft. Today in District Court, Michelle Ferguson was sentenced to a total of 29 months in Federal prison. William Ferguson was sentenced to a total of 14 months in Federal prison.
“Mr. and Mrs. Ferguson lied to their clients and used the stolen the identities of innocent people for their own financial gain.,” United States Attorney Timothy J. Heaphy said today. “They abused their positions as tax preparers for their own selfish greed.”
“Return preparer fraud and identity theft is a blight against our nation’s communities and threatens the veracity of our tax system,” said Sheila Olander, Acting Special Agent in Charge, IRS Criminal Investigation, Washington DC Field Office. “The Ferguson’s had a duty to their clients to protect their personal identifying information and to comply with the tax law. Today’s sentence serves as a reminder that all tax professionals have to respect the law and safe guard the financial interests of their clients’ and the taxpaying public.”
According to evidence presented at various hearing by Assistant United States Attorney C. Patrick Hogeboom III, the Fergusons operated a tax return preparation business out of their Roanoke home and committed fraud in two specific manners.
When meeting with clients face-to-face to prepare their taxes, the Fergusons would have their clients sign the return without reviewing its contents. The returns were set-up to have any refunds deposited directly into an account controlled by the defendants. To maximum refunds, Mr. and Mrs. Ferguson, without the knowledge of their clients, would include phony Schedule C's, Profit and Loss from Business to the returns. The Schedule C's would overstate income and deductions in order to maximize the amount of the false claim for refund. Once the tax refund was received by the defendants, they would write a check to each client for a fraction of the total refund received.
In addition, the defendants filed false tax returns using Social Security Numbers which had been stolen. Again, to maximize refunds, the defendants included phony Schedule C Businesses on the returns. However, the individuals who had their identity stolen did not receive any portion of the criminal proceeds obtained through the false claim for refund.
The investigation of the case was conducted by the Internal Revenue Service Criminal Investigations and the Social Security Administration. Assistant United States Attorney C. Patrick Hogeboom prosecuted the case for the United States.