Two men sentenced in tax fraud scheme at Phenix City business

Two men who pleaded guilty to conspiring to file more than 1,200 false tax returns using stolen identities were sentenced to prison terms Thursday, U.S. Attorney George L. Beck Jr. of the Middle District of Alabama said.

Ernest James Simmons Jr., 29, of Phenix City, was sentenced to two years and 15 days in prison while Calvin J. Perry, 28, of Atlanta was sentenced to 32 months in prison. Both pleaded guilty in December 2015 to one count each of conspiracy to defraud the government in connection with filing false income claims and one count of aggravated identity theft.

Perry and Simmons also were ordered to serve three years of supervised release. Perry was ordered to pay $308,152 in restitution and Simmons was ordered to pay $167,194 .

Beck said identity theft and tax fraud continue to plague the state. “However, the hard work of our law enforcement agencies and prosecutors also continue to crack down on these violators,” Beck said. “Hopefully, these stiff sentences will deter others who think about stealing for a living. You will be caught!”

Court documents and evidence presented at the sentencing hearing show that Simmons and Perry conspired with Perry’s mother, Pamela Ann Smith, to operate a large scale stolen identity refund fraud scheme from Smith’s tax return business, Jaycal Tax Service in Phenix City. To take part in the scheme, Smith recruited her son Perry, and Perry’s friend, Simmons.

Smith, Perry and Simmons opened multiple bank accounts and post office boxes. More than 1,200 federal income tax returns were filed using stolen personal identification information of actual individuals. Stolen information included their names and social security numbers.

Simmons was directly connected to false returns claiming more than $700,000 in fraudulent refunds. Perry was connected to returns claiming more than $1 million.

Checks from the U.S. Treasury checks were mailed to addresses and post office boxes before deposited into multiple bank accounts. All accounts were under the control of Simmons, Perry and Smith. Perry personally obtained more than $300,000 and Simmons personally obtained more than $150,000 from the scheme. In February, Smith was sentenced to serve four years, three months in prison after pleading guilty for her role in the scheme.

Beck and Acting Assistant Attorney General Caroline D. Ciraolo commended special agents of Internal Revenue Service–Criminal Investigation, who investigated the case and Trial Attorneys Gregory P. Bailey, Michael C. Boteler and Robert J. Boudreau of the Tax Division and Assistant U.S. Attorney Jonathan Ross of the Middle District of Alabama, who prosecuted the case.

This story was originally published April 28, 2016 at 8:35 PM with the headline "Two men sentenced in tax fraud scheme at Phenix City business."