Suspects charged in phony tax preparation scam

Income tax forms.

(Cleveland) - 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.

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.

Federal agents contend, Maryam Hague operated Hague United Services, a tax preparation business she operated out of her residences in Cleveland and Shaker Heights, and Her brother, Muhammad Hague, also operated a tax preparation business, Hague Financial Services.

Investigators claim Muhammad Hague recruited Natasha Johnson to work for Hague Financial in 2010, while both continued working for the Cleveland Water Department.

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.

Agents contend, 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.

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.

Agents maintain, 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.

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.

Investigators claim, Maryam Hague and her coconspirators filed approximately 786 false tax returns seeking more than $3.5 million in refunds from the IRS.

Prosecutors are seeking to seize Maryam Hague’s residence in Shaker Heights, according to court documents.

(Photos by Getty Images) 

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