Man, 70, from Roanoke, Va., sentenced to 3 years for tax scheme

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A 70-year-old man from Roanoke, Va., was sentenced today to three years in federal prison for his role in a scheme in which the Social Security numbers of victims -- including prisoners -- were used to file false tax returns and collect some $400,000 in refunds.

Frank Smith, a former Pittsburgh-area resident, became the first of seven accused co-conspirators to be sentenced. He was ordered to pay $24,706 back to the IRS, reflecting his gains in the scheme.

In 2011 and 2012, Smith opened accounts at Clearview Federal Credit Union in Natrona Heights, the Hill District Federal Credit Union and Parkvale Bank, prosecutors indicated in their indictment a year ago.

Thousands victimized in tax refund scheme

Thousands victimized in tax refund scheme

His co-conspirators, according to assistant U.S. attorney Greg Melucci, used stolen identification information to file tax returns, including some in the names of inmates of Georgia prisons. Some of the refunds, which totaled around $400,000, were directed to the accounts set up by Smith.

The conspirators aimed to reap around $2 million in fraudulent refunds, Mr. Melucci said.

Smith pleaded guilty to wire fraud, and the government in return dropped an identity theft charge.

"You admitted to personally soliciting under false pretenses names and Social Security numbers of at least two people" in Pittsburgh whose identities were then used in the scheme, said U.S. District Judge Nora Barry Fischer. She listed the real victims as the government, the taxpayers and the individuals whose Social Security numbers were used, and called identity theft "a plague not only nationwide, but particularly on this community."

She also remarked on Smith's history, which includes both 30 years working for a railroad and convictions for bad checks, theft, credit card fraud, embezzlement, larceny and other crimes.

"With all your work and your four kids, I wonder how you had time to do all of this," Judge Fischer said.

Smith declined to speak at his sentencing.

The sentencing came a day after federal officials unveiled a separate, but similar, indictment in which five people from three states are accused of refund fraud totaling $10 million, discovered by an Erie credit union employee.


Rich Lord: rlord@post-gazette.com or 412-263-1542. Twitter: @richelord.

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