Guards, Inmates Charged With Tax Fraud

Two guards and seven inmates at the District of Columbia’s Lorton prison have been indicted in what prosecutors called “easy money” tax fraud schemes.

The indictments, announced Friday, allege that the seven inmates filed virtually indistinguishable 1040 forms to the IRS, each falsely stating they were self-employed and claiming they were due a $722 refund.

The IRS mailed checks for that amount to all of the inmates but one, who received $181.31 because of an outstanding tax debt, said U.S. Attorney Helen Fahey.

“Each claimed self-employment income from various trades, such as coal mining, leather handbags and dry wall,” said U.S. Attorney Helen Fahey. “And each showed exactly $6,950 in income, $5,600 in deductions and a self-employment tax of $981.”

Officials indicated that the scheme originated with Melvin Jackson, a Lorton inmate since 1976. The said Jackson filed a 1994 return claiming he was a self-employed barber, then approached the six other inmates and offered to prepare false returns for them, too. .

All deposited their checks into their prison commissary accounts after paying Jackson a portion of the money. A government employee who worked in the prison mail room caught on to the scheme after noticing the refund checks, officials said.

If convicted, each inmate could be sentenced to another five years.

In a separate case, a Lorton guard pleaded guilty Friday to helping prepare false IRS returns for fellow correctional officers and Washington, D.C., police officers that the government says cost it $71,905 in undeserved refunds.

The guard, Maurice S. Marshal, had begun moonlighting as a tax preparer in 1989 and had helped prepare some 500 returns between then and 1995, routinely inflating deductions, prosecutors said.

Another Lorton guard, Lt. William Joseph Jenkins, was indicted on charges of filing false IRS returns for years 1992, 1993, 1994 and 1995.