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Crime & Courts

Documents shed light on ‘the queen’ of tax fraud

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Published:   |   Updated: February 18, 2014 at 03:55 PM

Rashia Wilson called herself the First Lady and claimed to be an income tax fraud pioneer, schooling others on how to commit fraud.

She bragged on Facebook about taking expensive trips and having so much money she forgot about a purse full of cash in her closet, investigators say.

Details of the Wilson investigation are contained in recently unsealed IRS affidavits and other documents filed in connection with searches of Wilson’s Wimauma home, her computers and Facebook accounts.

They provide a glimpse of how criminals have used identity theft and gaps in IRS security measures to file bogus tax returns and collect billions of dollars in fraudulent refunds. The national scandal centered in Tampa has been the focus of congressional hearings, watchdog reports and beefed-up enforcement efforts. The scam is entering its third tax season.

Wilson may not have been the biggest player in Tampa’s income tax fraud explosion, but she was one of the most brazen -- “flashy,” a sheriff’s investigator called her, “in your face about it.”

The affidavits show Wilson even had a picture of herself with a cool smile on her face, wearing an oversized jewel-encrusted pendant spelling out her first name as she held bundles of cash.

“YES I’M RASHIA THE QUEEN OF IRS TAX FRAUD,” reads a May posting on her Facebook page described in the affidavits. “IM’ A MILLIONAIRE FOR THE RECORD SO IF U THINK INDICTING ME WILL BE EASY IT WONT I PROMISE U!”

Five months later, a federal grand jury indicted Wilson on a weapons offense. Two months after that, she was indicted on 57 federal charges related to tax fraud.

</URL>Authorities say Wilson and her boyfriend filed more than 220 fraudulent tax returns claiming $1.9 million in refunds between 2009 and 2012. Most of the refunds were approved by the IRS, which sent out nearly $1.3 million, according to court documents.

The returns made use of tax credits that authorities say are known to be vulnerable to fraud. The returns listed Dallas addresses, and in most instances, the occupation of the purported filer was listed as “sales” or “cook.”

Scores of the returns were filed from local hotels, and some were filed from Wilson’s home, according to the court documents.

A visitor to her spacious house reported seeing bags of cash. She drove a new Audi, purchased with a $90,000 cashier’s check. She wore diamond jewelry and designer shoes.

At the same time, she collected $668 a month in food assistance from the state.

In applying for the benefit, she claimed she earned $200 a month working as a hairstylist.

She reported no employment income in her own name to the IRS.

In court pleadings, Wilson contended her Facebook account was hacked and that she didn’t post the “queen of tax fraud” boast. But the prosecution responded that the evidence cited by Wilson -- an email from Facebook about her password being changed -- implicated her further.

The Facebook notification gave the Internet address where the password was changed, and that address, according to the prosecution, was assigned to Wilson’s home.

The defense also said in the court pleading that Wilson’s “First Lady” name refers to her entertainment business, 1st Lady Entertainment. The picture of her holding cash relates to her business, according to the defense pleading. The prosecution responded that the business never filed a tax return and didn’t appear to generate any significant income.

Wilson has pleaded guilty to the federal weapons offense, related to a gun seized from her home, and is waiting to be sentenced. She has pleaded not guilty to the tax fraud charges, along with her boyfriend, Maurice Larry. They are scheduled to stand trial next month.

Wilson was viewed as a big player early on when law enforcement started looking seriously at the identity theft tax-refund fraud wave that seemed to flood the streets of Tampa and flow to other areas more than two years ago.

But Hillsborough Sheriff’s Cpl. Bruce Crumpler said investigators are now targeting others who committed just as much fraud, if not more.

Investigating this crime is like going fishing, Crumpler said. When you first drop your line into the water, you catch what looks to be a really big fish, the biggest fish you ever saw. But then if you keep casting your line, you reel in more fish the same size and even bigger.

Court documents show that when investigators searched Wilson’s Wimauma home in September, they seized at least nine computers, four wireless Internet hot spot devices, four cellphones, diamond jewelry, a handgun, a receipt for gold teeth, wigs, and designer sunglasses, bags and shoes from Gucci, Louis Vuitton, Prada, Calvin Klein, Fendi, Cartier and Christian Louboutin.

They also found evidence of tax fraud: debit cards, medical records, ledgers with personal information -- at least one ledger labeled “1st Lady” -- and stacks of money held together with rubber bands, according to the records.

Federal agents also searched three storage units linked to Larry. Inside, they found two customized Corvettes -- one was green with a Sprite logo and the other wrapped in chrome -- three laptop computers, medical records and ledgers with personal information for more than 1,600 people, records show.

So far, authorities have not said where they think the pair got all that personal information.

But the affidavits say Wilson and Larry are suspected of filing scores of fraudulent tax returns while staying at Tampa-area hotels.

The pair stayed at Chase Suites hotel at Rocky Point from April 18-25 last year, paying for their stay with a debit card that had been loaded with a fraudulent tax refund, the affidavits state. That refund was obtained through a return that had been filed from a Red Roof Inn in Tampa.

On its website, the Chase Suites hotel listed amenities including private entrances for guests, large work desks and complimentary wireless Internet access.

While Wilson and Larry were at Chase Suites, a total of 60 fraudulent returns were filed from the hotel, all reporting undistributed long-term capital gains credits of $9,987 and a taxpayer occupation of cook or sales. All but one listed a Dallas address. All of these factors are common to fraudulent returns linked to Wilson.

Hotel housekeeping staff members told investigators they remembered the two guests who didn’t let housekeepers into the room their entire stay. Larry would open the door slightly so the staff could hand him extra towels. The hotel manager remembered Wilson wearing the “Rashia” medallion.

A total of 61 fraudulent returns were filed from the Red Roof Inn between March 31 and May 8. All of them reported either undistributed long-term capital gains credits of $9,987 or refundable Hope education credits of $1,000.

Also, 48 of the returns listed a Dallas address, with the remaining listing Tampa-area addresses. Fifty-three of the returns listed cook or sales as the taxpayer’s occupation.

It’s not clear how much of a role these particular credits played in Tampa’s tax-refund fraud epidemic. But officials say refundable tax credits have long been vulnerable to abuse.

In early 2011, according to the affidavits, an informant said Wilson boasted about being the premier “drop girl,” a term adopted by women involved in the tax-refund fraud scheme. Another informant told detectives that Wilson offered instruction in how to file tax forms to defeat the IRS filtering systems.

Among their tools were fictitious tax credits.

A nonrefundable tax credit can reduce the amount of taxes owed to zero. A refundable tax credit -- such as the earned income credit for working people with low to moderate income -- can reduce tax liability then generate a payment from the government for any remaining credit amount.

For example, if a filer had to pay $500 in income taxes after all deductions are considered, a nonrefundable credit of $2,000 could reduce the taxes owed to zero. A refundable $2,000 credit would result in the government also sending the filer the $1,500 balance.

This makes refundable credits appealing to crooks.

“Without proper controls, billions of taxpayer dollars are vulnerable to erroneous claims and fraudulent tax schemes,” the inspector general for the IRS wrote in an October report, which led the IRS to announce it was tightening controls over the credits.

The IRS estimates it paid $99 billion to $119 billion in improper payments for the earned income credit alone from fiscal year 2003 through 2011, according to the report, which says the IRS has no estimate for improper payments of other credits.

The Hope education credit, also known as the American Opportunity Tax Credit, was the subject of a 2011 report by the Treasury Inspector General for Tax Administration, which said billions of dollars in the credits were being erroneously paid.

The $2,500 credit, designed to offset the costs of higher education, became refundable up to $1,000 in 2009, the same year investigators say Wilson started committing tax fraud.

IRS Inspector General J. Russell George told the U.S. House Ways and Means Committee in 2011 that the IRS requires no documentation to prove eligibility for the education credit. The inspector general’s 2011 report found, in part, that in 2010, 1.7 million tax filers received $2.6 billion in education credits with no supporting documentation in IRS files that they attended school.

The other credit mentioned on fraudulent tax returns linked to Wilson -- the undistributed long-term capital gains credit -- is not refundable and has not been the subject of an inspector general report. But it has been a known source of abuse.

That credit is normally used by regulated investment companies and real estate investment trusts to report taxes withheld by the companies and paid to the IRS. But in at least one case in 2004, authorities said the credit was used in a tax scam claiming an illegal tax credit for slavery reparations.

The criminals “have it down to a little bit of a science to where you can get back a desired amount,” said Crumpler of the sheriff’s office. Wilson “found herself using certain credits to get that desired amount.”

esilvestrini@tampatrib.com

(813) 259-7837

Twitter: @ElaineTBO

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