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A woman who ran a tax preparation business in North Carolina will spend close to two years in federal prison after prosecutors said she boosted client’s returns to pad their refunds.
Karen Marie Jones ran Jones and Stone Taxes in Durham. She was sentenced Friday to one year and 10 months in prison and must pay the government over $1.2 million in restitution, the U.S. Attorney’s Office for the Middle District of North Carolina said.
Jones’ defense attorney did not immediately respond to McClatchy News’ request for comment on Monday.
Prosecutors said the alleged fraud included two other women who worked for Jones — Andrea Marie Pasley and Audrey Renatta Odom.
Pasley pleaded guilty to tax fraud charges on Thursday and faces up to five years in prison. Odom pleaded guilty to conspiring to defraud the IRS in December. A public defender appointed to represent Pasley declined to comment on the ongoing case, and Odom’s defense attorney didn’t respond to a request for comment.
A grand jury indicted Jones and Odom in August, court documents show. Pasley was indicted in January.
According to the indictments, the trio fudged income tax returns they filed on behalf of clients and themselves from 2012 to 2017. A total of 1,388 tax returns were reportedly filed through Jones and Stone Taxes during that time.
“A majority of these tax returns contained false material items, such as false education credits, manipulated income to qualify for larger earned income tax credits, and false dependents,” prosecutors said in court documents. “Based on an analysis of the falsely claimed education credits, the tax loss is approximately $1,264,493.”
Jones and Stone Taxes charged anywhere from $375 to $3,000 for its services, according to court documents.
“On some occasions, the co-conspirators would make arrangements to meet the client at a check cashing business, where the co-conspirator would then require the client to cash the check and provide the co-conspirator with a portion of the cash,” prosecutors said.
The women are also accused of listing the names and Social Security numbers of individuals who were not their clients’ dependents.
When the IRS suspended the electronic filing identification number assigned to Jones and Stone Taxes in 2016, prosecutors said they started using another business’s number to electronically file taxes.
A federal judge ordered Jones to self report to the U.S. marshal’s office on July 8 to start her prison sentence.
Odom will be sentenced in June, prosecutors said, and Pasley’s sentencing hearing will be Aug. 11.