LaDonna Davis worked for her aunt's tax-preparation business, 2FT Fast Facts Tax Service, when she filed the 3,044 falsified federal tax returns, according to charging documents filed in federal court in D.C.
Those returns, the documents say, generated $13,953,317 in fraudulent income tax refunds for her clients from 2006 through 2011. Davis also filed about 665 false D.C. tax returns that produced $835,000 in fraudulent refunds and an unknown number of fraudulent returns in Maryland and Virginia, according to court records.
Davis was charged by information with conspiracy to defraud the United States and theft. The charges indicate that a plea agreement is in the works. Defendants can only be charged by information if they waive the right to have a grand jury hear evidence in the case.
Davis' attorney did not respond to a call for comment.
No hearings have been scheduled in the case.
Court documents say Davis and others at the tax-preparation business filed returns that listed fake businesses, itemized deductions and credits, which caused the clients' taxable income to be "grossly understated." Fraudulent refunds were issued to "virtually all" of the firm's clients, the documents say.
Davis allegedly falsified information on business profits and losses, medical expenses, charitable deductions, unreimbursed employee expenses in order to reduce clients' taxable income and so they would qualify for tax credits.
If a client didn't have documentation for entries on the tax return, Davis and others would use "whatever figures the client provided without any substantiation or they would make up figures so the client would receive income tax refunds," according to court documents.
Davis also allegedly gave clients false documentation for the charitable deductions claimed on their tax returns in case they needed the documents for a future audit.
Davis received no training in tax preparation beyond what she learned from her aunt, court records say. No charges have been filed against the aunt, who is mentioned in the complaint as an unindicted co-conspirator. Bill Miller, spokesman for the U.S. Attorney's Office for the District declined to say whether charges would be filed against anyone else, saying the case was still under investigation.