Virginia Couple Plead Guilty to Tax Fraud and SSN Misuse

Tuesday, July 31, 2012
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A husband and wife who ran a tax preparation business admitted Wednesday to filing false returns for others to pad their own income.

William and Michelle Ferguson, owners of the now-defunct F&F Tax Consultants in Roanoke, illegally collected about $120,000 in refunds, federal prosecutors said.

Both pleaded guilty in U.S. District Court in Roanoke.

Judge Glen Conrad said prison time is a "dead certainty" for Michelle Ferguson — one of her charges carries a mandatory two-year sentence — and "likely" for William Ferguson.

The Fergusons, who now live in Charlotte, N.C., were allowed to remain free on bond until they are sentenced Oct. 18.

In at least one case, the name and Social Security number of an Indiana resident were obtained by the Fergusons, who filed a tax return and collected a refund without the person's knowledge, Assistant U.S. Attorney Pat Hogeboom said.

In other cases, the Fergusons fabricated information from clients who sought tax help from their business, which they ran out of their home on Ambassador Drive Northwest.

Tax forms filed by the couple included earnings and losses — whichever generated the larger return — from businesses that did not exist, including day care centers, florists and hair braiding services, Hogeboom said.

William Ferguson, 41, pleaded guilty to conspiracy to submit a false tax claim.

Michelle Ferguson, 33, pleaded guilty to conspiracy to submit a false tax claim and a second charge of aggravated identity theft.

A third person — who has not been charged and was not named in court filings — provided stolen Social Security numbers to the Fergusons to use in filing false returns, prosecutors say.

That person then received a portion of the proceeds the Fergusons obtained from the Internal Revenue Service, according to court documents.

The scam, which ran from 2004 to 2007, led to refunds that ranged from $1,416 to $6,170, for a total of about $120,000.

In an interview with Roanoke County police, Michelle Ferguson said she learned how to prepare tax returns from a man who is currently in prison for tax fraud, Hogeboom said.

As part of a plea agreement, prosecutors agreed to recommend punishments at the low end of federal sentencing guidelines. Those guidelines have not yet been computed.