CAMDEN — An Atlantic City man was convicted Tuesday of filing false tax refund claims worth more than $2.5 million, conspiring to defraud the federal government and obstructing tax laws, the U.S. Department of Justice’s tax division said Tuesday.
In 2015 and 2016, Kenneth Crawford Jr. and his co-conspirators promoted and sold a “mortgage recovery” tax fraud scheme in which they obtained for their clients fraudulent refunds from the IRS, acting Deputy Assistant Attorney General Stuart M. Goldberg said in a news release.
Crawford promoted the scheme to individuals who were facing foreclosure or behind on their mortgage payments, and convinced them they could extinguish their outstanding mortgage debts by filing tax forms with the IRS, Goldberg said.
As part of the scheme, Crawford and his co-conspirators caused clients to file forms that fraudulently claimed that a substantial amount of taxes had already been withheld from them, Goldberg said.
These false withholding claims caused the IRS to authorize significant refunds to which the clients were not entitled, Goldberg said.
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As a result of Crawford’s scheme, more than $2.5 million in fraudulent refunds were sought from the IRS, of which the IRS paid out more than $1.3 million, Goldberg said. Crawford charged his clients a fee of roughly 25% of the refund obtained, he said.
When the IRS discovered the fraud and attempted to recover the previously issued refunds, Crawford provided clients with false and fraudulent documents to send to the IRS, directed clients to conceal from the IRS his role in filing the false returns, and advised clients to remove funds from bank accounts in their names to thwart IRS collection efforts, Goldberg said.
Sentencing is scheduled for March 20.
Crawford faces up to five years in prison for the conspiracy charge, five years for each false claim count and three years for obstructing internal revenue laws, Goldberg said. He also faces a period of supervised release, restitution and monetary penalties.
Crawford is currently detained pending sentencing as a result of his conviction and for previously violating conditions of pretrial release, Goldberg said.