9 Indicted In Tax Fraud Scheme That Targeted Homeless People

BALTIMORE (WJZ)—Maryland's Attorney General indicts nine people for tax fraud.

Alex DeMetrick reports, the alleged scam preyed on the most vulnerable.

The alleged scam involved preparing false tax returns to funnel refunds back into the hands of the preparers.

"The indictments of nine individuals including the franchise owner of several Baltimore Liberty Tax franchises," said Maryland Attorney General Brian Frosh.

According to the indictment, that franchise owner is Lateisha Vanessa Kone. Her Liberty Tax properties include one on Falls Road, one on South Broadway and one on North Charles.

The three other franchise locations are on East Monument Street, Pennsylvania Avenue and West North Avenue.

"Ms. Kone and her associates specifically targeted the most vulnerable among us. The homeless, the disabled, drug addicts, predominantly low income residents," said Maryland Comptroller Peter Franchot,

Allegedly working the street, they offered people $50 to do their returns.

Income was put down at between $6 to 8,000, where no W-2 is needed.

As an example: A return is prepared claiming a $615 refund is owed. The money comes to the preparer who deducts $489 for tax prep fees. The filer is left with $126, provided they ever show up to claim it.

This is not an indictment of all Liberty Tax franchises, and the parent company cooperated with the investigation. But the arrests are a warning to other tax scammers.

"We will not tolerate this kind of behavior," said Frosh.

Which allegedly involved over 1,100 returns totaling over $100-thousand in state tax refunds.

Friday's indictment is being called the tip of the ice berg.

Last year in Maryland, 20,000 fraudulent returns were filed totaling $39-million in false refunds.