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financial-crime:-florida-man-filed-745-tax-returns-in-4-years,-collecting-$235k-in-bogus-refunds-—-‘i-found-a-flaw-in-your-system,-and-i-took-advantage-of-it’
financial-crime:-florida-man-filed-745-tax-returns-in-4-years,-collecting-$235k-in-bogus-refunds-—-‘i-found-a-flaw-in-your-system,-and-i-took-advantage-of-it’

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Financial Crime: Florida man filed 745 tax returns in 4 years, collecting $235K in bogus refunds — ‘I found a flaw in your system, and I took advantage of it’

Most people dread having to file their taxes, but not Damian Barrett, authorities say.

Over a four-year period, the Florida man filed 745 tax returns in 19 different states, according to the IRS. The payoff: $235,000 in tax refunds he wasn’t entitled to.

Barrett, 40, who pleaded guilty in July to mail fraud, identity theft and filing false tax returns, was sentenced this week to 4 ½ years in federal prison, according to prosecutors in Oregon, where he had filed 348 returns alone.

“I found a flaw in your system, and I took advantage of it,” Barrett was quoted in court documents as telling investigators.

A message left with Barrett’s attorney wasn’t immediately returned.

Prosecutors say Barrett ran two tax preparation businesses in Homestead, Fla. — one legitimate, called Max Tax Experts, LLC, and the other, Winngate Tax Services, LLC, not.

From January 2015 until December 2018, prosecutors say Barrett took personal information including full names, Social Security numbers and employer identification numbers from clients of his legitimate business, and used them to file phony returns through his second company.

Prosecutors say Barrett would steer refunds into dozens of bank accounts he controlled — 70 of which he had opened in the names of his unwitting clients.

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“The nature and circumstances of the offense show that the success of the defendant’s scheme was by design. It was well-researched, planned, and executed,” prosecutors wrote in a sentencing memorandum. “Executing the fraud scheme appears to have been the defendant’s day-to-day job.”

In all, prosecutors say Barrett filed 745 tax returns requesting around $900,000 in refunds. Collectively, he was granted $235,000 in refunds before he was caught. 

“Mr. Barrett used his specialized knowledge as a tax preparer to obtain false refunds at the cost of honest taxpayers all over the United States. Today’s sentence is a victory for those of us who have been victims of a sophisticated tax refund scheme,” said IRS Criminal Investigation Special Agent in Charge Bret Kressin.

In addition to his fraud scheme, Barrett also intentionally excluded $21,000 in income from his own tax returns in 2016 and then didn’t file taxes at all in 2017, prosecutors said..

Barrett has also been ordered to pay $234,000 in restitution to the departments of revenue in 11 states and $74,000 to the IRS.

Check out MarketWatch’s new podcast, “Best New Ideas in Money,” hosted by MarketWatch editor-in-chief Jeremy Olshan and economist Stephanie Kelton.

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