|FOR IMMEDIATE RELEASE||
CONTACT: Matt Golden
|February 3, 2004||
Prison Inmates Charged in Tax Refund Scheme
- State Treasurer John E. McCormac announced today that two Texas prison
inmates have been indicted by a federal grand jury for attempting to defraud
New Jersey and several other states. The prisoners were found to have
submitted falsified income tax refund claims and now face charges of conspiracy
and mail fraud.
Gary Dewayne Dennington and Vaughn Duwayne Harman III, while incarcerated in Beaumont, Tex., prepared counterfeit W-2 forms that reported both men had earned wages and had state income tax withheld during 2002. Dennington and Harman then filed state income tax returns using the fictitious wage and withholding figures on the W-2 forms they previously created. Their filings claimed refunds to which the individuals were not entitled and caused those refunds to be mailed through the United States Postal Service.
Texas prison authorities, after noticing that refund checks had been issued to the inmates, became suspicious and alerted New Jersey Treasury officials. The Division of Taxation's Office of Criminal Investigation then proceeded, in conjunction with the Federal Bureau of Investigation (FBI), to uncover the scheme and prosecute the crime.
"The New Jersey Division of Taxation worked with the FBI to develop this case and notify our counterparts in other states about the scam," Treasurer McCormac explained. "They determined that Missouri and Connecticut had also been victims of the Texas inmates' fraudulent refund claims."
criminals conspired to steal from the citizens of New Jersey when they
used the tax system to obtain refunds under false pretenses," added
State Taxation Director Robert K. Thompson. "Schemes like this
cannot succeed if federal and state law enforcement authorities share
information, as they did in this instance. Our division will continue
to work cooperatively with law enforcement agencies throughout the country
to investigate and prosecute anyone who commits a crime of this nature."