Stratford Man Charged with Tax Refund Scheme

The following comes from the United States Attorney for the District of Connecticut.

Benjamin Green, III, 44, of Stratford, was arrested today for allegedly engaging in a tax scheme that caused the Internal Revenue Service to erroneously issue him a tax refund of more than $600,000.

On September 6, 2012, a federal grand jury sitting in New Haven returned an indictment charging Green with one count of making a false claim against the United States and one count of attempting to obstruct the administration of the internal revenue laws.

The indictment was unsealed following Green's arrest. According to the indictment (attached as PDF in photo gallery), in March 2009, Green filed an Individual Income Tax Return for the 2008 tax year.

In the tax return, Green asserted the "Original Issue Discount" (OID) tax scheme, in which taxpayers fraudulently claim significant amounts of OID interest income and federal tax withholding on their federal tax returns.

The object of the OID tax scheme is to obtain large tax refunds from the U.S. Treasury by fraudulently claiming significant federal tax withholdings that exceed the smaller amount of tax due on the falsely claimed income.

The indictment alleges that Green falsely claimed to have received $920,063 in taxable interest income, and to have $929,702 of federal income tax withholdings for the 2008 tax year. Based on this false information, Green claimed a refund from the IRS in the amount of $616,434.

In March 2009, the IRS wired $616,434 to three bank accounts designated by Green. When the IRS tried to collect the erroneously issued refund, Green undertook a course of conduct to inhibit the IRS's efforts to recover the money, including sending frivolous correspondence to the IRS, hiding real property in the name of a nominee entity to impede the IRS's collection efforts, and falsely complaining that the IRS had commenced unauthorized collection and enforcement actions against him.

The indictment further alleges that Green, who has not returned any of the erroneously-issued funds, used the majority of the funds to pay off his mortgage.

Following his arrest, Green appeared before United States Magistrate Judge Holly B. Fitzsimmons in Bridgeport. Green is currently detained. The charge of making a false claim against the United States carries a maximum term of imprisonment of five years, and the charge of attempting to obstruct the administration of the internal revenue law carries a maximum term of imprisonment of three years.

U.S. Attorney Fein stressed that an indictment is not evidence of guilt. Charges are only allegations, and each defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.

This matter is being investigated by the Internal Revenue Service -- Criminal Investigation. The case is being prosecuted by Special Assistant United States Attorney Sean Beaty and Assistant United States Attorney Susan L. Wines.

gail jarvis September 29, 2012 at 08:22 PM
MAC The simple answer to your question is they are all Bureaucrats working for the government, No one will be "responsible" and No one will "fired". Welcome to our Government----and they want to be in charge of OBAMACARE!! Yikes!!!!!
Bonnie October 01, 2012 at 11:40 AM
Oh my.... And I was audited for interest on my mortgage... I had all my tax returns, the nonsense I had to go through with the IRS to show them that I did indeed have the statement from our bank. I'm forever on their radar! They will audit me every year from last year on, they think we were trying to scam on our tax return to avoid paying instead of getting a $400.00 return.... Really? They sent me a bill for $3500.00 saying that they do not have a statement from my bank for our mortgage interest, they got one every other year!!! I think they need to stop wasting their time, our money, on us, the measly $400.00 returns and focus more on those that really scam their way through the system!
Todd Frazier October 01, 2012 at 12:01 PM
The IRS collects over 2.5 trillion per year, and less than 1% of the refunds they issue are fraudulent. Both banks and insurance companies have higher fraud losses.
lscience October 01, 2012 at 02:26 PM
Funny how this article fails to mention that the IRS collected an extra $300,000.00 in taxes as a result of Ben's 2008 tax filing. Real tax fraud involves doing filings whereby you're trying to hide $$ and assets from the IRS, not file stuff which would make you pay the IRS more $$ because of the extra income claimed on your tax filing for 2008. If the IRS claims this action is criminal in nature, thats impossible. For there to be a crime there must be an injured party. Who at the IRS and the Treasury was injured as a result of a tax filing that allowed to collect more $$ to apply to the national debt (interest only)? If they say Civil was the nature of this crime, then we're speaking of contracts...and the 1040 he filed for that year was the contract that was entered into by Ben and the IRS. He claimed more income on his return, paid more taxes on that, and received some $$ back from that as a result. About 90% of the above article is all B.S. Just like Todd said above, banks and insurance companies engage in far worse real cases of fraud than one person can ever do.
MAC October 01, 2012 at 09:20 PM
Who are you, the scumbag cheat's lawyer?! We see no proof that the IRS collected ANYTHING from your friend "Ben." As to "there must be an injured party" for there to be a "crime," there are MILLIONS of us "injured parties," who are called "taxpayers"!!! Ben STOLE our OUR $$$$$ that we worked hard for, and lawfully sent in to the IRS!


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