The mastermind of a decade-long tax- and debt-relief scam that resulted in $325 million in bogus tax-refund claims has been sentenced to eight years and four months in prison.
Yolonda Denise Thompson and her husband, Albert Upshur, were convicted in federal court in Philadelphia last year of filing dozens of false tax-refund claims on behalf of people who had hired the couple to provide debt-relief services. Upshur was sentenced to seven years in December.
Thompson’s sentencing brings to a close a more than decade-long Internal Revenue Service investigation into the couple, who are followers of the sovereign citizen movement, which denies the legitimacy of the U.S. government. Its adherents often refuse to pay taxes and gum up the legal system through obstructive court filings.
Thompson also went by the name Qhama Al, and Upshur was also known as Kelinde Jaha, prosecutors said.
Despite receiving multiple notices from the IRS that they were under investigation, the pair continued to file false claims, prosecutors said, with Thompson “constantly evolving her methodology to find one that worked.”
“ ‘It is clear from the manner in which Mr. Upshur conducted himself during pre-trial hearings and the non-jury trial that he has significant mental issues.’”
The pair represented themselves at trial and couldn’t immediately be reached for comment, as they are both incarcerated. A lawyer appointed by the court to assist Thompson in her defense did not immediately respond to a message seeking comment. Thomas Dreyer, a lawyer similarly appointed to assist Upshur said he offered “no real legal argument,” at trial, instead citing bible passages and civil law statutes that were deemed inadmissible in a criminal case.
Prosecutors said Thompson and Upshur’s scam dates back to at least 2009, when the couple, who were living in Philadelphia, would offer people facing bankruptcies and foreclosures help getting their debts erased in return for a fee of $500.
The couple would then list their customers as employees of an entity they created called the Thompson Trust. The pair filed trust tax documents listing excessive tax withholdings on behalf of the clients, then filed claims for huge tax refunds, prosecutors said.
If any refund was issued, Thompson and Upshur said they would keep 20% of the money, according to court papers.
Virtually all the claims were ultimately rejected, but one — for $1.5 million on behalf of a client in Michigan — slipped through in 2011, according to court documents. When the man tried to deposit the check at his bank, employees there contacted tax authorities to verify that it was genuine, and the payment was blocked. The episode triggered an investigation by the IRS that would take years to conclude.
After receiving numerous notices from the IRS that they were under investigation and being told to cease filing fraudulent claims, the couple switched tactics, filing huge overpayments for their clients drawn from closed bank accounts in hopes that the overpayment would trigger an automatic refund check, prosecutors said. That ploy was also unsuccessful.
Thompson and Upshur were finally charged in 2018, but the case was significantly delayed by the repeated filing of obstructive motions by the defendants, by a court-ordered mental-health exam of Upshur to determine his competency to stand trial and by the pandemic, prosecutors said.
Dreyer wrote in a sentencing memo that Upshur had refused to ever communicate with him after he was assigned the case in 2018.
“It is clear from the manner in which Mr. Upshur conducted himself during pre-trial hearings and the non-jury trial that he has significant mental issues,” Dreyer wrote.
In a letter to the judge seeking to have her conviction thrown out, Thompson argued that the IRS and the U.S. government had no legal standing in the case and therefore were unable to bring suit against her.
This article was originally published by Marketwatch.com. Read the original article here.