Tax losses to the government topped $100,000, authorities said.
NEWARK -- An employee of an Irvington tax preparation business pleaded guilty in federal court to preparing fraudulent tax returns to collect fees from refund anticipation loans, according to the Internal Revenue Service's Criminal Investigation Unit in Newark.
Darlene Covington, 32, entered a guilty plea to a one count charge of aiding and assisting in the preparation of false tax returns, it said. Covington entered the plea Tuesday before U.S. District Judge Katharine S. Hayden.
"IRS-Criminal Investigation stands ready to investigate anyone who would put a taxpayer at risk for a quick profit," said Jonathan D. Larsen, Special Agent in Charge in the Newark Field Office. "Ms. Covington's plea today shows that protecting taxpayer money is a matter IRS-Criminal Investigation takes extremely
seriously."
According to the IRS, Covington was a tax preparer at KCJ Financial Corp. in Irvington who had access to personal identification information, including names and Social Security numbers. Using the information from 24 individuals without their knowledge, Covington prepared tax forms so that an uncharged, unnamed co-conspirator would receive the funds, the IRS said in a news release.
She then used the filed false income tax returns to secure refund anticipation loans from various banks, it said. Covington received a fee of $235 for each loan that was issued, it said.
The fraudulent returns resulted in a tax loss to the federal government of $106,732, it said.
Covington filed the false returns in 2009 and 2010, according to an indictment.
The count of aiding and assisting in the preparation of false tax returns carries a maximum prison sentence of three years in jail as well as a fine of up to $250,000, the IRS said.
Covington is scheduled to be sentenced Oct. 25, it said.
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