Memphis Tax Fraud Lawyers

Memphis Tax Fraud Lawyers: When Family Members Steal Student Identities For 100-Month Sentences

Marsha King stole the identities of her own sister’s students. King’s sister was a teacher who printed out rosters containing student names and identifying information. Without her sister’s knowledge, Marsha King used those names to file false and fraudulent federal income tax returns. The returns were filed electronically from Memphis – traced back to IP addresses from King’s Sprint account and her University of Memphis student account.

She was sentenced to 100 months in federal prison. More than eight years. The sister who trusted her with access to her workspace had no idea her family member was using her students’ identities to steal from the IRS. The betrayal wasn’t just to the government – it was to family and to students who had done nothing wrong.

The Western District of Tennessee has seen variations of this scheme repeatedly. Identity theft combined with tax fraud. Deceased persons’ identities. University student rosters. The personal information that people trust others to protect becomes the raw material for federal crimes. And the sentences are measured in years, not months.

The Sisters Student Rosters – 100 Months

Heres exactly what Marsha King did wrong. Her sister worked as a teacher. Teachers have access to student information – names, identifying details, the kind of data that exists for legitimate educational purposes. Kings sister printed out rosters. She had no idea what her sister would do with access to that information.

Marsha King used those student names to file false and fraudulent federal income tax returns. The IRS traced the returns to IP addresses from her Sprint account and her University of Memphis student account. The digital trail led directly to her.

Think about the layers of betrayal. Kings sister trusted her. The students on those rosters trusted there teacher to protect there information. None of them knew there identities were being used to steal from the IRS. The refunds generated from those false returns went into Kings pocket – money she wasnt entitled to recieve, obtained through identities she had no right to use.

Her sentence: 100 months in federal prison for theft of government money and aggravated identity theft. Thats more then eight years. The aggravated identity theft charge carries a mandatory two-year consecutive sentence on top of whatever else the court imposes.

$65 Million In COVID Relief Fraud

Renata Walton and Nicole Jones operated R&B Tax Express in Moscow, Tennessee. From 2020 through 2024, they allegedly filed false claims seeking more than $65 million in COVID-19 relief funds. The Employee Retention Credit and Sick and Family Leave Credits were designed to help businesses survive the pandemic. Walton and Jones allegedly used those programs to steal.

A federal grand jury returned a 53-count indictment. Wire fraud. Money laundering. Preparing false tax returns. Obstruction of justice. The indictment covers four years of alleged fraud targeting programs created during a national emergency.

Consider those numbers for a moment. $65 million sought through fraudulent claims. 53 counts in the indictment. If convicted, Walton faces 20 years for each wire fraud count, 10 years for each money laundering count, 3 years for each false return count, plus 20 years for obstruction.

14 Years For Using Dead Peoples Identities

Rhonda Mayweather received one of the longest sentences for tax fraud in Memphis history. 14 years in federal prison. Her crime: using the names and Social Security numbers of people both alive and dead to file false tax returns.

Mayweather and her co-conspirators stole personal information and used it to create false W-2s. They prepared false 1040s. They filed bogus returns through TurboTax, TaxSlayer, and other internet tax preparation software.

Before the scheme was uncovered, Mayweather and her partner had recieved $550,475 in fraudulent refunds. More then half a million dollars stolen from the IRS using identities of people who didnt know there information was being used. Some of those people were dead – they couldnt even discover the fraud in there own names.

Heres the uncomfortable truth about identity theft tax fraud. The victims often dont know until they try to file there own legitimate returns. They submit there taxes and the IRS rejects them – becuase someone already filed in there name. The refund they were expecting becomes a months-long investigation to prove there the real taxpayer.

When IRS Employees Commit Fraud

The Western District of Tennessee has prosecuted multiple cases of IRS employees committing fraud. The people paid to enforce tax law breaking it themselves. Five former IRS employees were sentenced for defrauding federal COVID-19 relief programs. One of them, Saulsberry, pleaded guilty to money laundering and received 18 months in prison.

And thats not the only case. Twenty-four current and former IRS employees were indicted for benefits fraud in a single case in the Western District. The agency that investigates tax crimes had employees committing there own crimes.

Heres what these cases reveal about the system. Even the people inside the enforcement apparatus sometimes break the rules. The knowledge that should prevent fraud sometimes enables it instead. When they decide to exploit those vulnerabilities, there insider knowledge makes the fraud more sophisticated – and more damaging.

Tennessees Federal-Only Reality

Tennessee has no state income tax. The Hall income tax, which taxed interest and dividend income, was repealed effective January 1, 2021. For Memphis residents, this means something important: all income tax fraud prosecution is federal.

Unlike states with income taxes where fraud might be prosecuted at the state level, Tennessee sends everything to federal court. There is no state-level “lesser” option. The District Attorney wont handle income tax cases. The Tennessee Attorney General wont prosecute income tax fraud. Everything goes to the U.S. Attorneys Office for the Western District of Tennessee.

Heres what that means practically. Federal sentencing guidelines apply. Federal prison is the destination. Federal conviction rates – over 90% – determine the odds. The 100 months Marsha King recieved, the 14 years Rhonda Mayweather got, the potential decades Walton and Jones face – all federal consequences with no state alternative.

Tax Preparer Fraud In Memphis

Pia Sims was a Memphis tax preparer who filed more than 80 bogus tax returns. She was charged with access device fraud, possession of access device making equipment, aggravated identity theft, and conspiracy to defraud the United States. The maximum potential sentence: 42 years in prison and $750,400 in fines.

Tara Mitchell operated Tara’s Tax Preparation Service and was sentenced to 18 months in federal prison. She prepared approximately 13 false tax returns for the 2009 tax year, causing a tax loss of nearly $113,227. Her co-defendant recruited taxpayers for her – bringing in clients for fraudulent returns.

The Pryor family ran Better Dayz Tax Services, LLC. Robert, Elaine, and Joshua Pryor were all sentenced for preparing and filing false tax returns. The tax loss exceeded $122,000 over three years. The family business became a family criminal enterprise.

Employment Tax Crimes In Memphis

Larry Thornton caused his companies SEI and First Touch to stop paying employment taxes beginning in 2007. Between 2007 and 2011, Thornton collected more than $6.8 million in employment taxes from employees paychecks – money withheld from workers to pay there tax obligations. He kept the money instead of remitting it to the IRS.

Employment tax fraud is particulary destructive. The employees had taxes withheld from there paychecks. They saw the deductions on there pay stubs. They expected that money to go to the IRS on there behalf. Thornton kept it.

The employees become victims twice over. They lose the money that was withheld. They may also lose Social Security credits becuase the wages werent properly reported.

Defense Strategy In Memphis

If your facing tax fraud exposure in Memphis, the calculus involves understanding the federal-only nature of Tennessee prosecution.

The King case shows what happens when identity theft meets tax fraud – 100 months. The Mayweather case shows that using deceased identities creates 14-year sentences. The Walton/Jones case shows that COVID relief fraud at scale triggers 53-count indictments.

The time to address tax fraud exposure is before any of that happens. Voluntary disclosure programs exist. Coming forward before the IRS finds you creates opportunities to resolve issues civily – with penalties and interest, but potentialy without prison.

If theres tax fraud exposure in your situation – returns prepared by someone now under investigation, employment taxes your business didnt remit, COVID credits you werent entitled to claim – the time to address it is before anyone starts looking. Appeals go to the Sixth Circuit Court of Appeals. The 90% federal conviction rate means most people charged get convicted.