D.C. employee pleads guilty in $4m tax fraud scheme

By |
Photo - Tax documents (ThinkStock photo)
Tax documents (ThinkStock photo)
Local,DC,Crime,Ben Giles

An employee at the District's Office of Tax and Revenue pleaded guilty Wednesday to filing more than a thousand fraudulent tax returns that netted more than $4 million in unwarranted refunds from D.C. and the federal government.

Kimberle Y. Davis, a "control technician" at the OTR, pleaded guilty to conspiracy to defraud the government and first-degree theft through her part-time job at a District-based tax service. She's at least the third employee in Chief Financial Officer Natwar Gandhi's 12-year tenure to be caught stealing, prompting Mayor Vincent Gray to press Gandhi for plans to overhaul the tax office.

Over the course of the 2008 and 2009 tax-filing seasons, Davis helped file 282 fraudulent D.C. tax returns at her part-time job at 2FT Fast Facts Tax Service, a tax preparation company based in Southeast D.C., according to court records.

The D.C. government handed out $304,909 in unwarranted refunds for the filings Davis helped prepare, prosecutors said.

During the same two tax seasons, Davis and other individuals at the business filed approximately 973 fraudulent federal returns that raked in approximately $3.8 million, according to court records.

Davis provided clients with fake charity receipts to fool auditors and checked District computers to see whether those individuals were facing audits, according to prosecutors.

Her actions were part of a long-running scheme at the tax preparation company, which filed nearly 3,700 returns from 2006 to 2011 that produced fraudulent refunds of more than $14.7 million, the U.S. Attorney's Office for D.C. announced Wednesday.

Davis, who was placed on administrative leave from the District's tax office in June, faces a maximum of 15 years in prison and must pay restitution as a part of her plea agreement. Her sentencing has yet to be scheduled.

It was the D.C. tax office's safeguards that found irregularities in tax filings prepared by Davis, according to spokesman David Umansky. The office referred the case to the U.S. attorney in 2011.

Davis also lied about being employed outside the OTR. Employees at the District's tax office may not work for tax preparation companies, according to Umansky.

Another worker at the private tax service, 29-year-old District resident Ladonna Davis, pleaded guilty in October 2011 to her role in the scheme and awaits sentencing.

bgiles@washingtonexaminer.com

View article comments Leave a comment
Author:

Ben Giles

Staff Writer - Crime Beat
The Washington Examiner