United States v. Gandy

926 F.3d 248 (6th Cir. 2019)

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Nature of the Case

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Facts

Ds created trust documents using their own names, their friends' names, or the names of identity-theft victims as trustees, successor trustees, and beneficiaries. Ds obtained an Employer Identification Number (EIN) from the IRS for each trust. Using these EINs, they submitted fictitious IRS Form 1041s, the form used for income-tax returns for estates and trusts. The returns falsely claimed that each trust was due a refund in the amount of the excess withholding for incomes taxes. The idiots at the IRS relied on the veracity of the signed returns, which were submitted under penalty of perjury, and issued refund checks to the fictitious trusts. Ds had the refund checks mailed to PO boxes. Ds requested $1,425,548 in refunds,. The IRS issued refund checks totaling $939,103.05. Ds netted $360,469.05 from those checks. Several banks closed the trust accounts before Ds were able to withdraw all the funds. The IRS seized two checks sent to a P.O. Box at a UPS store because the owner of the store alerted the authorities about the suspicious checks. Ds while industrious were not too smart either. Ds used their own identities in the early days of the scheme. It became kind of a family and community project with different people using their real names and identifications to claim refunds. Ds had to keep track of the documentation for 21 separate trusts, obtain and track EIN numbers for each trust, complete and file a Form 1041 seeking a refund for each trust, obtain P.O. Boxes to use as the return addresses for the refund checks, open bank trust accounts, and deposit the refund checks. Sharon (D) rented at least three P.O. Boxes in her name. Sharon (D) kept digital and written records for many of the fictitious trusts. During a search, police found dozens of other stolen identities. They discovered that Ds had ordered a 'For Deposit Only' stamp for one of their fraudulent trust accounts. The stamp purported to represent the signature of Herbert Coleman White, whose house in Detroit was robbed in 2012. Law enforcement officers also found White's driver's license, Social Security card, and other personal identifying information during their search of Sharon's (D) house. Ds used White's name and personal information in connection with several of the fictitious trusts that they created in order to obtain fraudulent tax-refund checks. Anthony (D), Christopher (D), and Sharon (D) were convicted on several counts. This appeal resulted.