On the eve of her trial date, A Fort Worth tax preparer accused of fabricating $26 million in refund claims for clients pleaded guilty Friday to six counts of creating false returns and now faces a maximum of 18 years in a federal prison.
U.S. District Judge John McBryde accepted the plea agreement, which reduced the counts against Joyce Marie Simmons from 29. The trial was scheduled for Monday after McBryde voided a plea agreement that would have shrunk the counts to just one.
Simmons, 42, who went from running a Snow Cone stand in Polytechnic Heights to acquiring a new strip shopping center valued at $860,000 and a $78,000 BMW, created bogus business expenses and invented fake children so clients could receive hefty refunds. Many are now being contacted by the IRS.
At the height of her scam, last-minute filers spilled out the door of her Diamond Tax and Notary Service at 2812 Miller Ave., and circled the building, residents said.
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McBryde said he would pass sentence on Oct. 2, and ordered Simmons immediately placed into custody, said Ronald C. H. Eddins„©, the U.S. assistant attorney prosecuting the case.
The federal judge threw out the earlier plea agreement in March after the Internal Revenue Service belatedly discovered that the fraud scheme was for more ambitious than it had first reckoned.
False refunds totaled $14.8 million for the three years under criminal investigation and an additional $13.4 million if 2006 and 2007 were taken into account, according to court documents quoting the IRS.
Simmons¡¦ share of inflated refunds ¡X excluding her tax-preparation fees ¡X topped $1.1 million in two years alone, according to an IRS investigator.
Her attorney, Leon Haley, indicated that he would request that Simmons be released pending sentencing, Eddins said. Haley, who did not respond to two messages, has defended Simmons since May 18 ¡X after the court discovered that she owned considerable commercial property and therefore was not entitled to a taxpayer-funded public defender, who had represented her since August.
The federal judge can give Simmons any sentence from probation to 18 years, as well as ordering her to pay restitution, Eddins said. Under the voided plea agreement, she would have had to pay a fine equal to twice her gain from the tax preparation scam, up to $250,000.
From 2006 through 2008, the IRS initiated more than 600 investigations of fraud among tax preparers. During that time, 356 tax preparers were convicted, with more than 80 percent of them sentenced to prison, home confinement or electronic monitoring, The AP reported.
Last week, the IRS said it is working on new rules that could require paid tax preparers to be licensed in hopes of reducing mistakes and combating fraud.