Defendants received over $3.5M in fraudulent tax refunds

A Mill Spring couple charged with tax refund conspiracy of over $3.5 million in fraudulent tax returns pleaded guilty Monday, Oct. 29 in the U.S. District Court in Asheville, according to Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina.

Senita Birt Dill, 45, and Ronald Jeremy Knowles, 40 were charged with one count of false claims conspiracy, one count of access device fraud and one count of aggravated identity theft, according to a press release submitted by the U.S. Attorney’s Office.

According to the charging document, the plea agreement and statements made in court, from 2009 to 2012 the defendants participated in a scheme to obtain false tax refunds by filing false tax returns using fraudulently obtained personal identification information including names, dates of birth and social security numbers.

According to the press release, Dill and Knowles filed federal and state tax returns using tax preparation software programs and used fictitious information about the filer’s income and amount of federal tax withheld. The U.S. Attorney’s Office said the couple were careful to use figures that would maximize the amount of the refund and minimize the risk of detection.

“Court records show that the defendants engaged in an elaborate scheme to collect the fraudulent tax refunds,” states the U.S. Attorney’s Office release. “For example, the defendants rented a home on a lake in a neighborhood surrounded by vacation homes and then used neighboring addresses on the fraudulent tax returns. Since the vacation homes were not occupied daily, the defendants were able to monitor the mailboxes and retrieve the fraudulent refund checks from those mailboxes upon delivery.”

Knowles and Dill also used addresses in Greenville and Greer, S.C., which is where Knowles’ business is located, the press release said.

Court records showed that the couple would deposit the refund checks directly into their bank accounts and on some occasions would receive tax refunds in the form of pre-paid debit cards.

Reports indicated that Dill and Knowles filed over 1,000 false tax returns using the fraudulently obtained personal identification information. They made fraudulent tax refund claims in excess of $5 million and actually received tax refunds totaling over $3.5 million, according to the U.S. Attorney’s Office.

Dill pleaded guilty to all three counts, one count of false claims conspiracy, one count of access device fraud and one count of aggravated identity theft and Knowles pleaded guilty to false claims conspiracy and access device fraud, according to the press release. Both are currently being held in local federal custody.

The release states that the false conspiracy count carries a maximum sentence of 10 years in prison and a $250,000 fine, the access device fraud count carries a maximum of 15 years in prison and a $250,000 fine and the aggravated identity theft count carries a maximum of two years in prison.

A federal judge will determine Knowles and Dill’s sentence at their sentence hearings

which have not yet been scheduled.

The IRS and the USPIS handled the investigation of the case, with the assistance of the Polk County Sheriff’s Office.

Assistant U.S. Attorney Don Gast of the U.S. Attorney’s Office in Asheville handled the prosecution.