Feds: Stratford Man Sentenced in 'Corrupt Tax Refund Scheme'

A Stratford man was sentenced to more than four years in prison Monday after he was found guilty of stealing more than $600,000 'through a corrupt tax refund scheme,' according to the Office of the U.S. Attorney for the District of Connecticut

Benjamin Green III, 45, received a 51-month prison sentence, followed by three years of supervised release, from U.S. District Judge Vanessa L. Bryant in Hartford.

After a three-day trial, Green was convicted of one count of making a false claim against the United States, and one count of attempting to obstruct the due administration of the internal revenue laws on Nov. 12.

According to the evidence presented at trial, in March 2009, Green filed an Individual Income Tax Return for the 2008 tax year with the IRS. 

Tax Scheme

"On the return, Green asserted the fraudulent “Original Issue Discount” (“OID”) tax scheme, in which taxpayers falsely claim significant amounts of OID interest income and federal tax withholding on their federal tax returns," Tom Carson, the communications manager for the Connecticut U.S. Attorney's Office, stated in a press release.

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

False Claims

On his federal tax return, 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. The IRS erroneously issued a $616,434 tax refund to Green based on his fraudulent tax return. 

'Trips to Hawaii'

"After receiving the refund, Green spent or dispersed almost all of the funds within months by taking trips to Hawaii and other locations, shopping at high-end retail-stores, paying off his mortgage and other loans, making improvements to his home, and giving money to family members," Carson stated.

When the IRS tried to collect the erroneously issued refund, Carson reports 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. 

Ordered to Pay Restitution 

"The IRS was eventually able to recover a portion of the erroneously issued refund through wage levies, levies on bank accounts, and seizure of GREEN’s personal property," Carson stated.

He added that on Monday, Judge Bryant ordered Green to pay $582,074.50 in restitution, "which reflects the remaining balance of the money he stole, plus interest."