Busted: Massive Missouri Tax Fraud Scheme
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KANSAS CITY, Mo. (AP) — Five months after a Kansas City man was permanently barred from filing tax returns, a grand jury this past week charged him and more than a dozen of his associates with taking part in the biggest tax fraud scheme ever tried in Missouri.
In a 72-count federal indictment, federal prosecutors said Gerald A. Poynter, 46, also known as “Brother Jerry Love,” used a fraudulent tax scheme to help clients receive hundreds of thousands of dollars in tax refunds to which they weren’t entitled.
Thirteen other “associates” or “branch managers” from eight states also are facing federal conspiracy charges related to Poynter’s alleged operations. Five, including Poynter, live in the Kansas City area, while the rest are spread out across the country.
In all, Poynter and the alleged co-conspirators attempted to receive $96 million in fraudulent returns from the Internal Revenue Service, although 89 percent of the claims were rejected and the rest resulted in refunds to clients of about $3.5 million, prosecutors said.
“Kansas City was the hub of a nationwide conspiracy that attempted to receive nearly $100 million in fraudulent tax refunds,” U.S. Attorney Beth Phillips said. “Federal agents worked diligently to expose the largest false claims scheme ever prosecuted in Missouri. These indictments serve as a warning to anyone who might consider engaging in a similar fraud that such schemes won’t be tolerated and their perpetrators will be prosecuted.”
Prosecutors said the scheme involved the use of 1099-Original Issue Discount forms, which typically are used by tax filers who must pay taxes on income they receive from bond investments. They say
Poynter, his branch managers and office staff prepared and filed at least 284 tax returns, then got a portion of whatever money was refunded, prosecutors said.
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