Fraud At Liberty Tax Service In Detroit? Justice Department Wants To Shut Down 5 Offices
DETROIT (WWJ) - The U.S. Justice Department is working to shut down five Liberty Tax offices in Detroit.
A complaint filed in federal court against franchise owner Craig Comer, of Royal Oak, says people at his Liberty Tax offices prepared tax returns that fraudulently overstate refunds and claimed refundable credits by using bogus dependents, inflated expenses and other false itemized deductions.
The Justice Departments says returns filed by the business from 2008 to 2013 have cost the U.S. Treasury about $4.5 million.
The complaint also alleges that in order to increase their fees, the defendants altered completed tax returns already signed by the customers and forged customers' signatures on returns.
Click here to read the complaint (.pdf format)
The defendants also allegedly added false information to internal Liberty Tax Service documents to give the illusion that the franchises are properly verifying customer information when preparing customers' tax returns, according to the 30 page complaint.
In one instance of fraud, a man was cheated out of his $5,000 return.
"Customer 4 believed that he would not receive any of the refund claimed on his tax return because he thought any refund would automatically be diverted to pay child support payments he thought he owed," the complaint says. "However, the IRS did refund Customer 4 more than $5,000 on April 25, 2012, which the IRS paid by direct deposit to an account at Herring Bank listed on the tax return for the direct deposit of any refund. Customer 4 never received the $5,000 refund and has never had a bank account at Herring Bank."
Liberty Tax offices included in the investigation are located at: 1611 East 8 Mile Road, Hazel Park; 2742 E. 7 Mile Road, Detroit; 9324 Woodward Avenue, Detroit; 3401 Woodward Avenue, Detroit; and 2631 Gratiot Avenue, Detroit.