MILLERSBURG -- A Millersburg man was sentenced to more than two years in federal prison for fraudulently claiming to the Internal Revenue Service more than $1.1 million in tax refunds to which he was not entitled.
In November, Dennis Dean Miller, 62, pleaded guilty in U.S. District Court to six counts of false claims and one count of obstructing internal revenue laws.
On Monday, March 13, he was sentenced to 26 months in prison by U.S. District Judge James Gwin. The judge also ordered Miller to pay $132,147 in restitution. He also was fined $5,000.
The restitution order is reflective of the amount of the actual loss to the IRS; however, the full $1.1 million he attempted to collect in returns is chargeable, according to Craig J. Casserly, a public information officer for the IRS.
He notes the scheme used by Miller is not the most common, but one of many false claims made by criminals to the IRS in an attempt to collect money to which they are not entitled. "It's one of many we see in the area, but not as prevalent as others," Casserly said.
According to the indictment, filed in August, Miller engaged in a "1099-OID scheme." In doing so, he prepared fictitious IRS forms, in which it was falsely reported that "financial institutions had withheld large amounts of federal income tax on behalf of (Miller) with respect to non-existent income.
"Based on this fictitious withholding, false federal income tax returns were prepared and filed with the Internal Revenue Service claiming large tax refunds to which (Miller) was not entitled," according to the indictment.
For tax years 2006-2011, Miller made false claims for refunds totaling $1,121,420.
Additionally, between May 2012 and December 2013, Miller took several actions to obstruct and impede the IRS's investigation into his fraudulent activity. In doing so, he used a trust to conceal ownership of his property and, under the auspice of paying penalties on fraudulent returns, wrote several checks to the IRS on previously closed accounts.
This case was prosecuted by Assistant U.S. Attorney Henry F. DeBaggis following an investigation by the IRS.
According to the sentencing order, Miller was ordered to surrender himself to the U.S. Marshal on May 9 to begin serving his commitment. After he is released from custody, Miller will be on parole for an additional three years.
"Mr. Miller unlawfully manipulated the tax code for his own personal gain, reaping hundreds of thousands of dollars in fraudulently procured tax refunds," said Frank S. Turner II, acting special agent in charge, IRS Criminal Investigation, Cincinnati Field Office.
"Taxpayers thinking about engaging in tax-defier conduct, such as filing IRS Forms 1099-OID, Original Issue Discount, to avoid their federal tax obligations should think twice."
Reporter Christine Pratt can be reached at 330-674-5676 or email@example.com.