Fake W-2's netted prisoners $400K in tax refunds, feds say

Federal court records say two East Orange men created 66 false tax returns that generated nearly $400,000 in fraudulent refunds.

NEWARK -- It can be hard enough to make $70,000 a year.

It's impossible to earn that much income if you're in jail. 

But two East Orange men allegedly made it look just like that for dozens of individuals in 2013 and 2014, court records show. 

U.S. Attorney Paul J. Fishman's office Monday charged Reginald Eaford, 45, and Winfred Moses, 48, with creating and filing false income tax returns on behalf of inmates at the Essex County Correctional Facility -- where they had been at the time as well.

Both were charged with conspiracy to defraud the U.S. government and aggravated identity theft. 

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According to the complaint, law enforcement at the jail who were monitoring activity in inmate accounts saw that Eaford was depositing "unusually large amounts" into his account. 

Authorities said Eaford, Moses and other unidentified individuals conspired to create phony W-2 forms indicating inmates made $70,021 each in income and were due refunds. The tax returns allegedly were sent from Moses' residence.

The refunds would be sent either to the inmate's account or to Moses' home. Eaford, Moses and the inmates would split the proceeds, which the inmates would use for bail, lawyers and other expenses, the complaint says. 

Eaford and Moses created 66 tax returns this way, court records say, creating nearly $400,000 in fraudulent tax refunds.

After he was released in 2014, Eaford continued to file false tax returns, records say. 

Authorities also say Eaford admitted creating phony returns when federal investigators searched his residence. 

The conspiracy charge carries a maximum sentence of five years in prison, the U.S. Attorney's office said. The aggravated identity theft charges carry a mandatory sentence of two years in prison that must be served after the sentences on the conspiracy charges.

Fishman credited agents at the U.S. Internal Revenue Service, the U.S. Postal Inspection Service and the Internal Affairs Division of the Essex County jail in the investigation.