A federal jury today found a New Jersey citizen guilty of conspiring with people from Georgia, North Carolina, Virginia, and New York as part of a “mortgage foreclosure” tax fraud scheme, as well as facilitating the filing of false returns among other tax offenses.
From March 2015 to 2016, Pemberton’s John Barry Jr. and his associates falsely told clients that they could pay off their outstanding mortgage debts by receiving a tax refund, according to court documents and evidence presented in court. To implement this scheme, Barry and his associates filed forms with the IRS in which they fraudulently claimed that financial institutions were withholding and paying significant taxes to the IRS on behalf of Barry’s clients, although no such payments were made. Barry then ordered clients to file fake tax returns that required significant refunds based on fictitious tax liens. These false withholding claims forced the IRS to pay clients over $ 3 million in reimbursement. Barry typically charged each client a commission of 20 to 35 percent of the reimbursement the client received, and then split the commission with some of the accomplices.
In addition to his participation in the “mortgage collection scheme,” Barry did not file his own tax return for 2016 despite earning income in excess of the filing threshold and Barry did not report or pay taxes on income received from schemes in that tax year.
Barry is due on December 1 and faces a maximum sentence of five years in prison for conspiring to cheat with the IRS, three years in prison on each count of aiding and aiding filing of false tax returns, and three years in prison for obstructing. internal income laws and one year in prison for not filing a tax return. A federal district court judge will make a decision on any conviction after considering the US Sentencing Guidelines and other statutory factors.
This was announced by Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division.
The case was investigated by the IRS-Criminal Investigations.
Lawyers Sean M. Green and Samuel B. Bean from the Department of Justice’s Tax Division are prosecuting the case.