North Carolina Man Pleads Guilty to Filing False Claims for Tax Refunds and Identity Theft

A Raleigh, North Carolina, man pleaded guilty today to conspiracy to file false claims and identity theft, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Thomas G. Walker of the Eastern District of North Carolina.

According to court documents and court statements, Christian Rhodes and other co-conspirators recruited individuals to provide their personal information, which Rhodes and his co-conspirators used to prepare false federal individual income tax returns.  The tax returns that Rhodes prepared and filed contained false wages, income tax withholdings and deductions, resulting in the false claims for tax refunds.  Rhodes also used stolen identities to file false claims for tax refunds, and directed the Internal Revenue Service (IRS) to deposit these refunds electronically into bank accounts that he controlled, as well as accounts in the names of and controlled by third-party taxpayers.  The tax loss as a result of these false claims is more than $3 million.

Rhodes faces a statutory maximum sentence of 10 years in prison for the conspiracy charge and a mandatory minimum sentence of two years in prison for aggravated identity theft.  He also faces financial penalties, including fines and restitution.  Senior U.S. District Judge James C. Fox scheduled sentencing for the Aug. 5^th term in Wilmington, North Carolina.

Acting Assistant Attorney General Ciraolo and U.S. Attorney Walker commended the special agents of IRS-Criminal Investigation, who investigated the case, and Assistant U.S. Attorney Susan Menzer of the Eastern District of North Carolina, and Trial Attorneys Lauren Castaldi and Rebecca Perlmutter of the Tax Division, who are prosecuting the case.

Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.  Additional information about tax fraud schemes to watch out for may be found on the IRS-Criminal Investigation website.