Maryland Woman Pleads Guilty to $1.1M Tax Refund Fraud Scheme

A Maryland woman pleaded guilty yesterday to attempting to steal more than $1.1 million in government funds by filing false tax returns with the IRS.

According to court documents and statements made in court, between December 2019 and March 2020, Kendra Scarborough, of Oxon Hill, Maryland, filed three false tax returns in the names of purported trusts that she controlled. In total, these tax returns sought more than $1.1 million in refunds that the trusts were not entitled to receive. Scarborough's scheme resulted in the IRS issuing a refund of $412,000 to one of the purported trusts. Scarborough used these funds to pay for, among other things, the mortgage on her personal residence.

Scarborough pleaded guilty to one count of theft of government funds. She is scheduled to be sentenced on Sept. 9 and faces a maximum penalty of five years in prison. She also faces a period of supervised release, restitution, and monetary penalties. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Assistant Attorney General Colin McDonald of the Justice Department's National Fraud Enforcement Division made the announcement.

IRS Criminal Investigation is investigating the case.

Trial Attorney Melissa Siskind of the Criminal Division's Tax Section is prosecuting the case.

On April 7, the Department of Justice announced the creation of the National Fraud Enforcement Division ("Fraud Division"). The Fraud Division is laser-focused on investigating and prosecuting those who commit fraud against the American people. The Department's work to combat fraud supports President Trump's Task Force to Eliminate Fraud, a whole-of-government effort chaired by Vice President J.D. Vance to eliminate fraud, waste, and abuse within Federal benefit programs.