The owner of several eastern Louisiana tax preparation businesses was sentenced to slightly more than seven years in prison and ordered to pay $148,673 in restitution by a New Orleans federal court judge.
Prosecutors have said she raked in more than $100,000 in fees from clients in 2011 and 2012 while filing fraudulent tax returns for them.
Hazel M. McGary, 46, of Robert, also known as Hazel Alexander and Hazel Kimble, had previously pleaded guilty to corrupt endeavors to obstruct and impede the due administration of internal revenue laws, willfully aiding and assisting in the presentation of a false tax return and aggravated identity theft. U.S. District Judge Lance M. Africk handed down the sentence Thursday.
Albany police were called to the Just for You store in February 2012 when dozens of angry customers gathered outside, upset they had not received promised refund checks. Officers had to force customers to allow employees to drive out of the store parking lot. The department then shut down the business after discovering it did not have a license to operate in the town.
McGary had operated tax preparation businesses in Hammond, Baton Rouge, Covington and Albany, according to a factual basis document filed in federal court. The businesses went under a variety of names, generally variations of Just for You Services.
“Defendant McGary changed the businesses’ names from year to year, making it difficult for the IRS to track the returns filed by defendant McGary through the businesses,” the document states.
She “fraudulently manipulated” her clients’ income amounts so they would qualify for larger refunds, it continues. Prosecutors said she primarily abused the Earned Income Tax Credit, which is available to taxpayers with low and medium incomes.
In one example given, McGary filed a fraudulent refund claim for $7,378 and collected a $350 preparation fee, which she deducted directly from the refund.
McGary prepared taxes for hundreds of customers each year, and every return filed by her businesses in 2011 and 2012 claimed a refund. Prosecutors collected 23 tax returns she prepared to present had the case gone to trial.
They represent a $148,673 loss to the federal government, the factual basis claims.
Investigators found a binder titled “W-2 Log” where “McGary stored the names, addresses, Employee Identification Numbers, and other information of multiple employers for use on false Forms W-2,” the factual basis states.
She also filed false information on her own 2010 tax return, in which she listed her occupation as cook and reported her adjusted gross income at $18,413, while earning “substantially in excess of this amount from her tax preparation business,” according to the factual basis.
Tax preparers must submit an application and undergo a screening before they can be authorized to submit files electronically to the IRS. McGary used other people’s names, Social Security numbers and other identification to obtain an IRS Electronic Filing Identification Number, according to court documents.