Apr. 5—A Claremont couple charged with creating fake tax returns in the names of their adult sons, then collecting over $36,000 in refunds while their children were serving in the military and deployed overseas, have pleaded guilty in federal court to charges of conspiracy to defraud the Internal Revenue Service.
William Cote, 49, pleaded guilty on Monday to a felony charge of conspiracy, while his wife, Kelly Cote, 52, pleaded guilty on March 24 to one felony count of conspiracy for her role in the scheme.
According to court documents and information contained in the plea agreements, from 2011 through 2016 the Cotes filed false tax returns using the identities of Kelly's sons and William's stepsons, J.E. and T.E.
While J.E. was deployed overseas serving in the United States military, the Cotes prepared a false tax return for tax year 2011 using his identity. While T.E. was also stationed overseas serving in the U.S. military, the Cotes prepared and filed false tax returns for tax years 2012 through 2015 using his identity.
To obtain larger refunds, the Cotes falsely listed J.E. and T.E. as heads of household on the tax refunds for these returns, and deposited the money into their own joint bank account.
In February 2013, while T.E. was stationed overseas, the IRS audited the 2012 tax return the Cotes filed using T.E.'s identity.
On May 6, 2013, in a phone call with an auditor, William impersonated T.E. and "confirmed" the details in the fraudulent 2012 tax return. Later that same day, to support the false tax return, the Cotes prepared and faxed the auditor a lease agreement that falsely stated that T.E. rented William and Kelly's home. Kelly forged T.E.'s signature on the lease agreement.
The Cotes received more than $36,700 in fraudulent tax refunds as a result of the scheme, officials said.
Kelly Cote pleaded guilty on March 24, 2021 and is scheduled to be sentenced on June 30. William Cote pleaded guilty on Monday, and is scheduled to be sentenced on July 15.
"Knowingly submitting a fraudulent tax return is a serious federal felony offense," said Acting U.S. Attorney John Farley in a statement.
"These defendants not only submitted false claims for tax refunds, but supplemented their efforts using lies and a forged document to further their scheme."