14 Indicted in K.C. Tax Refund Scam

A tax scam in the Kansas City area is ending poorly for 14 people who have been indicted for allegedly defrauding the federal government out of millions of dollars in false tax refunds.  The ringleader of the scam was Gerald A. Poynter II, who also goes by the nickname “Brother Jerry Love.”  The Kansas City Star has more:

Poynter and his partners enticed clients into the alleged scheme by promising them they could “recoup” their debts by allowing the conspiracy to prepare their tax returns.

After gathering records of the clients’ debts, the conspirators purportedly prepared tax returns showing that they were owed enormous refunds — in some cases almost $1 million — from taxes withheld from interest income.

According to the indictment, the returns then were filed as if the clients themselves had prepared them, while the conspirators separately filed other bogus documentation backing up the false claims.

“They made the tax returns appear as if they were entitled to larger refunds than they were entitled to,” Nelson said.

Once the IRS made the refunds, each of the “branch managers” — as Poynter called his partners — kept some of the money and then shared it with Jerry Love Ministries as a “love donation,” the indictment alleged. He also maintained a website, called “Luckytown,” to allegedly promote the scheme.

Poynter filed more than 80 such returns for his direct clients, claiming about $25 million in refunds.

While the conspiracy allegedly attempted to obtain a total of about $96 million in refunds, the IRS denied most of those claims and actually paid out about $3.5 million.

You can find more about the story in the K.C. Star.