Investigator says hundreds of bogus returns were filed covering 2006 through 2012. A Stillwater inmate is main focus of inquiry.
Some tax cheats risk going to prison. The IRS says it’s investigating a ring of tax cheats who risk staying there.
According to court documents, a group of Minnesota inmates has been running a “large-scale tax refund scheme” from behind prison walls.
The focus of the investigation is Tony Robinson, 28, serving a 91-month sentence at the state prison in Stillwater for first-degree criminal sexual conduct with a family member under 13. He is due to be released May 15.
Authorities also are investigating various alleged accomplices outside of prison, including Carmen Rayshelle Allen, 29, of Wayzata, who works as a personal care attendant. Allen declined to comment Monday.
Details of the case were revealed in a recently unsealed search warrant application filed by Kenneth Fry, a criminal investigator with the Internal Revenue Service. Though he doesn’t say how much money was obtained, Fry says the case involves hundreds of bogus returns covering tax years 2006 through 2012.
“The tax returns contain fraudulent and fictitious information, including wage and withholding information,” Fry said.
Fry’s affidavit details tax returns filed by at least 10 current or former inmates convicted of premeditated murder, robbery, assault, weapons charges, theft, stalking and burglary. Refunds were deposited into bank accounts and ultimately were split among co-conspirators, he said.
“Based on interviews of some inmates involved in the scheme, it is well known throughout the Minnesota state prisons that Tony Robinson is operating a tax-fraud scheme,” Fry said.
One inmate, identified only as J.M., said that he met Robinson in the prison gym. “Robinson told J.M. that he could make some money by filing tax returns,” Fry said. He said Robinson told J.M. to write down his Social Security number and to complete a power-of-attorney form that would allow Allen to cash his checks. Fry said that Robinson prepared fraudulent tax returns for J.M. for 2007 through 2009.
Robinson entered prison in January 2009. Investigators from the Minnesota Department of Corrections learned in February 2010 that he was in the tax-preparation business, Fry said. They intercepted a letter Robinson allegedly sent to Gary Norris, a convicted thief who had been an inmate at Faribault state prison. The letter instructed Norris to provide Allen with his notarized power-of-attorney form. Norris had filed returns for 2007 and 2008.
A few months later, corrections officials intercepted a letter from Robinson to Michael Rolla, an inmate at Lino Lakes state prison, saying he should expect delays in his payment. “... I am extremely Busy. As I’m reping for over 100 inmates,” Robinson wrote. Rolla had filed suspicious returns for 2007 and 2008, Fry said.
‘Don’t tell him the amount!’
Corrections investigators searched Robinson’s cell in April 2010 and recovered tax forms and blank power-of-attorney forms. He said that he had prepared taxes for five inmates and that he charged $50 for his services. Corrections officials told him to quit his tax business, Fry said.
Eight months later, though, investigators intercepted mail Robinson sent to Allen at a UPS Store in Minneapolis, telling her to expect a call from an inmate at Faribault named Darnell Wilkes. “When he calls, tell them that a check has came. ... Don’t tell him the full amount of the check!” Robinson wrote.
Postal records show that the UPS mail drop rented by Allen received correspondence from Robinson and a Faribault prisoner named Michael Jauert. The box also received mail from the Department of Treasury/IRS addressed to several Stillwater prison inmates.
Lavon Antione Johnson, serving a life sentence for murder, listed the UPS mail drop on a tax return claiming $1,374. The money was deposited into a bank account in Robinson’s name.
Investigators followed Allen as she visited Moose Lake Correctional Facility using an alias, and they recorded some of her conversations with Robinson. They searched her apartment in Wayzata this month, seizing correspondence, computer storage devices, laptop computers, a cellphone, credit and debit cards, financial records, a safe, a bag of “white powdery substance,” pills and paraphernalia.