Cataula woman, daughter sentenced in $440,000 tax-fraud scheme

A Cataula woman and her daughter have been sentenced to federal prison for filing fraudulent income tax returns worth $440,000.

Chief U.S. District Court Judge Clay Land sentenced Melissa Lowe, 47, to two years in federal prison and ordered her to pay $440,000 in restitution. He sentenced Bianca Lowe, 29, to nine months in prison and ordered her to pay $78,687.

Each is prohibited from working in any tax-related business when released.

Federal agents said the mother from 2011 to 2013 ran Priority Tax Service in Cataula, where the daughter occasionally worked. The business mostly filed tax returns for individuals.

“The Lowes engaged in a sustained practice of filing fraudulent income tax returns designed to inflate their customers’ tax refunds,” authorities said.

They said the Lowes’ scheme most often involved filing “Schedule C” forms asserting large business losses that offset the amount of taxes owed and increased the refunds. “In most cases, the Schedule C businesses were either nonexistent or their losses were drastically overstated,” investigators said.

The Internal Revenue Service became suspicious when Priority Tax Service’s Schedule C filings appeared drastically more voluminous than the national average for businesses of that size. Most of the customers were unaware of this, and therefore not held responsible.

Besides the IRS, agencies involved in the investigation included the Harris County Sheriff’s Office and the Columbus Police Department. Assistant U.S. Attorney Mel Hyde was the prosecutor.

This story was originally published November 23, 2017 at 5:17 PM with the headline "Cataula woman, daughter sentenced in $440,000 tax-fraud scheme."