FORMER CPA CONVICTED OF FILING $8 MILLION IN FALSE CLAIMS FOR TAX REFUNDS

FROM:  U.S. JUSTICE DEPARTMENT

Monday, June 2, 2014

Former Utah Certified Public Accountant Convicted of Filing False Claims for Tax Refunds Totaling More Than $8 Million and Presenting a $300 Million Fictitious Financial Instrument

Dick Reid Jenkins, of Heber City, Utah, was convicted today, in U.S. District Court for the District of Utah,  of eighteen counts of filing false claims for income tax refunds and one count of presenting a fictitious financial instrument, the Justice Department and Internal Revenue Service (IRS) announced.  Jenkins was charged by a superseding indictment on June 26, 2013.  He is scheduled to be sentenced before U.S. District Judge Clark Waddoups on Sept. 9, 2014.

According to court documents and evidence presented at trial, Jenkins filed a false 2007 individual income tax return for himself in September 2008 which claimed an income tax refund of $402,920.  In October 2008, Jenkins filed a false amended 2004 individual income tax return which claimed an income tax refund of $434,261.  Both false claims were based on the use of a false IRS Form 1099-OID, Original Issue Discount.  The IRS listed this scheme as one of its “ Dirty Dozen ” worst tax scams each year from 2009 through 2014.

According to court documents and evidence presented at trial, in addition to his own false returns, Jenkins caused sixteen false federal individual income tax returns to be filed on behalf of other individuals from September 2008 through February 2009.  These false tax returns also used false IRS Forms 1099-OID and claimed federal income tax refunds totaling $8,407,623.  On June 30, 2008, Jenkins passed and presented a false and fictitious financial instrument to the U.S. Department of the Treasury in the amount of $300,000,000.  Jenkins was licensed by the state of Utah as a Certified Public Accountant at the time his criminal conduct occurred.

Jenkins faces a statutory maximum penalty of 25 years in prison and a fine of up to $250,000 for passing and presenting a fictitious obligation to the United States.  Jenkins also faces a maximum penalty of five years in prison and a fine of up to $250,000 or twice the gross gain or loss caused by the defendant for each count of presenting false, fictitious, and fraudulent claims to the United States.

Kathryn Keneally, Assistant Attorney General of the Department of Justice Tax Division, commended the special agents of IRS - Criminal Investigation who investigated the case, and Trial Attorneys Stuart Wexler and Michael Romano of the Tax Division, who prosecuted the case.