Narrowed ‘Tax Time’ fraud case goes to trial

The “Tax Time” tax fraud case is not what it used to be.

Last year a Muscogee County grand jury delivered a 58-count indictment against Ken Wilford Degourville Jr. and Lakeisha Nichole Degourville, the couple whose 3551 Macon Road business Tax Time was raided by authorities on Nov. 17, 2014.

That’s when state revenue agents accused the pair of filing about 2,000 fraudulent tax returns on behalf of Tax Time’s customers.

“They would create businesses that the people didn’t own. They would forge W-2s and withholdings to make it look like they withheld more money than they actually had,” a revenue agent said after the raid.

The two this week are being tried on fewer charges, the case having been reindicted this past March 29 to narrow its scope.

According to the new indictment, Ken Degourville, 37, faces 19 counts, seven each of filing false documents and computer forgery, three of identity fraud and one each of theft and tax evasion. Lakeisha Degourville, 36, faces 14 counts, six each of filing false documents and computer forgery, and one count each of theft and tax evasion.

The first prosecution witness on Wednesday was state revenue agent Natara Smith, who testified that though evidence showed the Degourvilles collected $556,740 in fees in 2013, they filed no income tax return on that revenue.

Smith at first said the couple filed no 2012 tax return, but she corrected that on cross-examination.

She said state and local authorities raided the business after questioning taxpayers who told investigators their returns were inaccurate. Agents also talked to former employees whose personal identification numbers as tax preparers were assigned to returns they never touched, she said, noting one woman got a number and never went to work for Tax Time, yet the business used her number to file returns.

All the returns were filed electronically, with the refunds sent to a bank that deducted the tax-preparation fee before direct-depositing the rest, Smith said.

Defense attorney Mike Garner, who represents Lakeisha Degourville, questioned whether Tax Time itself defrauded the state of any revenue if the refund went back to the clients. Garner and Smith got into a circular discussion of whether the taxpayer bore more guilt than the Degourvilles, if the couple got no money from the refunds.

Smith repeatedly replied that the Degourvilles were using tax ID numbers that weren’t theirs and inflating deductions, and Garner persisted in asking whether the customers were the primary beneficiaries who broke the law.

Another witness Wednesday was Claude Summers, who had Tax Time file his return for 2013.

Of his deductions, he testified, “One of them said I had a business, which I don’t.” Having retired from the Army after 22 years of service, he works as a driver for an engineering company.

His return said he owned a mechanic’s shop, with deductions for $768 in advertising costs, $5,240 in truck expenses and $12,962 in business losses, plus office expenses and insurance, he testified under questioning by Chief Assistant District Attorney Al Whitaker.

He also got an education credit, though he hasn’t been back to school since he left the service, he said. “I didn’t even know it was on there until somebody told me.”

Under cross-examination by William Kendrick, Ken Degourville’s attorney, Summers said he was unsure how much of a refund he got, but acknowledged that in the past, he always had to pay more in income taxes.

“I got some money back. I figured it was my money,” he said, adding that he had asked for the maximum deduction from his paycheck, and figured he finally was due a refund.

The refund was $4,618, Kendrick said.

Kendrick questioned Summers about his past tax returns, saying they showed he previously claimed an education credit and other deductions when someone other than Tax Time was doing his taxes.

Summers said he entrusted the preparer to get his deductions right, and asked Kendrick, “What’s your point?”

Because of Summers’ combative testimony, Garner drew laughter when Judge Gil McBride asked whether he’d like to cross-examine the witness.

“I wouldn’t dare,” Garner replied.

The trial is expected to resume at 10:15 a.m. Thursday in McBride’s 11th-floor Government Center courtroom.

This story was originally published June 1, 2016 at 6:16 PM with the headline "Narrowed ‘Tax Time’ fraud case goes to trial."