Source: United States Attorneys General
Headline: Three people charged for their roles in conspiracy to recruit poor and homeless people and file fraudulent tax returns on their behalf
Three people were charged in federal court for their roles in a conspiracy to recruit poor and homeless people to allow them to file fraudulent tax returns on their behalf, said U.S. Attorney Justin E. Herdman and IRS Special Agent in Charge Ryan L. Korner.
Muhammad Hague, 40, of Avon, and Richard A. Warren, 37, of Philadelphia, were each indicted on one count of conspiracy to make false claims.
Maryam Hague, 38, of Shaker Heights, was charged in a criminal information with one count of conspiracy to commit theft of public money and one count of theft of public money.
Maryam Hague operated Hague United Services, a tax preparation business she operated out of her residences in Cleveland and Shaker Heights. Her brother, Muhammad Hague, also operated a tax preparation business, Hague Financial Services, according to court documents.
Muhammad Hague recruited Natasha Johnson to work for Hague Financial in 2010, while both continued working for the Cleveland Water Department, according to the indictment.
In 2011, Maryam Hague recruited her brother to recruit people to provide their personal identification information, so Maryam Hague would prepare and file false tax returns on behalf of claimants. She eventually taught Muhammad Hague how to prepare and file the false tax returns on his own, according to court documents.
From 2011 through 2013, Muhammad Hague, Johnson and others operated Hague Financial, which held itself out as a tax preparation business. Muhammad Hague, Johnson and others sometimes conducted Hague Financial’s business out of the Cleveland Water Department during normal business hours, according to court documents.
Muhammad Hague oversaw the operation of Hague Financial Services. Hague, Johnson and others promoted Hague Financial Services through paper flyers, door-to-door solicitation, and other means. They focused their recruiting efforts on lower-income neighborhoods in Cleveland, including homeless shelters, according to court documents.
Maryam Hague recruited Warren and his wife to recruit people in the Philadelphia area who would provide their personal identification information to Maryam Hague, who would then then prepare and file false income tax returns in the claimants’ names. Maryam Hague agreed to pay a $1,000 “referral fee” for each claimant. Warren and his wife established and maintained business bank accounts for shell companies they established in order to receive their referral fees, which were paid out of claimants’ tax refunds, according to court documents.
The tax returns reported falsified occupations and amounts of income, typically through unverifiable “household help” occupations such as caregiver, lawn care and self-employed. Based on the falsified income, and sometimes based on falsified education expenses or dependents, the tax returns often fraudulently claimed a variety of tax credits, such as the Earned Income Credit, Making Work Pay Credit and American Opportunity Credit, among others, according to court documents.
Maryam Hague and her coconspirators filed approximately 786 false tax returns seeking more than $3.5 million in refunds from the IRS, according to court documents.
Prosecutors are seeking to seize Maryam Hague’s residence in Shaker Heights, according to court documents.
If convicted, the defendants’ sentences will be determined by the Court after reviewing factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
This case was investigated by the Internal Revenue Service – Criminal Investigations. It is being prosecuted by Assistant U.S. Attorney Elliot Morrison.
An indictment or an information is only a charge and is not evidence of guilt. Each defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.