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|FOR IMMEDIATE RELEASE
MONDAY, JANUARY 26, 2004
TDD (202) 514-1888
FEDERAL COURT BARS MULTISTATE TAX SCAM
TARGETING AFRICAN-AMERICAN BUSINESS OWNERS
Internal Revenue Service Prevented
More Than $2.7 Million In Fraudulent Claims
WASHINGTON, D.C. - The Justice Department today announced that a federal
court in Fort Worth, Texas has permanently barred Sherri L. Harris and
S-N-K Enterprise, Inc. (also known as S&K Enterprise) from promoting an
illegal tax scam that targets African-American business owners. The permanent
injunction order, signed by Judge John H. McBryde of the U.S. District Court
for the Northern District of Texas also bars Harris and her company from preparing
federal income tax returns for others. The order was entered in a civil suit
that the Justice Department filed last month.
The government complaint alleged that Harris, of Oklahoma City; Ebony Scott
of Arlington, Texas; and Kelvin Bailey of Madison, Tennessee - all doing business
as S-N-K Enterprise - had charged customers several hundred dollars to prepare
and submit applications for federal minority-owned business grants. Court papers
filed in the case alleged that the defendants never filed the grant applications
but instead, without the customers’ knowledge, filed amended federal
income tax returns for the customers seeking refunds ranging from approximately
$44,000 to $93,000 per return, based on claiming bogus tax credits. The Internal
Revenue Service prevented over $2.7 million in losses to the U.S. Treasury
by identifying and disallowing these fraudulent refund claims.
“The Justice Department is working tirelessly to stop illegal tax schemes,” said
Eileen J. O’Connor, Assistant Attorney General for the Justice Department’s
Tax Division. “Those who sell these scams can expect to face substantial
penalties for their actions, including criminal charges where appropriate.”
Judge McBryde also ordered Harris and the company to notify customers of the
court’s order and to provide the Justice Department with the names, addresses
and phone numbers of customers and company salespersons. The suit against Bailey
and Scott is still pending.
More information on this case is available at http://www.usdoj.gov/tax/03_tax_651.htm.
The Justice Department has recently obtained injunctions against a number of
tax-scam promoters. More information about these cases is available on the
Justice Department website at http://www.usdoj.gov/tax/TEN.htm.