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Two Men Charged in $3M Tax Fraud Scheme
So, here’s the scoop: Two guys, Henry Remington Herod from Minneapolis and Matthew McDowell from Port Allen, Louisiana, are in some serious trouble. They’ve been charged with trying to scam the U.S. government out of over three million dollars in tax refunds. U.S. Attorney Andrew M. Luger announced the charges, which include conspiracy to defraud the United States and making false claims.
Between April 2022 and May 2023, these two allegedly cooked up a scheme to file fake federal income tax returns for themselves and others. They made up false employment, income, and tax credit information to get big refunds that they weren’t entitled to.
For the 2021 tax year, Herod filed bogus tax returns claiming refundable sick and family leave tax credits for self-employed folks who couldn’t work because of COVID-19. Then, for the 2022 tax year, both Herod and McDowell filed more fake returns, this time claiming refundable tax credits for federal taxes paid on fuel supposedly used for off-highway business purposes.
In total, they filed 115 fraudulent tax returns, raking in about $3,032,839 in refunds they shouldn’t have gotten.
Now, Herod and McDowell are each facing one count of conspiracy to defraud the United States. On top of that, Herod is hit with nine counts of making false claims. They both made their initial court appearances in December 2024 and were released with conditions.
Houston Tax Preparer Sentenced for Fraudulent Returns
A Houston tax preparer has been sentenced for aiding and assisting in the preparation and filing of false income tax returns, announced U.S. Attorney Alamdar S. Hamdani. Krystal Wright pleaded guilty on April 17.
U.S. District Judge Jeffrey V. Brown has ordered Wright to serve 24 months in federal prison, followed by one year of supervised release. Additionally, she was ordered to pay $525,404 in restitution. During the hearing, the court reviewed her criminal history, the duration of her scheme, and the resulting harm to taxpayers, concluding that a prison sentence was warranted. The court expressed hope that Wright would learn from her actions.
Wright was the sole proprietor and only tax preparer at WW2F in Freeport for six years. Most of her clients did not own businesses or discuss any business-related income or expenses with her. After completing a tax return, Wright did not review the documents with her clients and only provided them with the refund amount and the first two pages of the return. This practice prevented her clients from identifying overstated or false items on their tax returns.
Between 2017 and 2020, Wright prepared and filed approximately 83 federal income tax returns containing false and fraudulent items. These included qualified solar electric property costs, charitable contributions, business expenses, wages, salaries, tips, and supplies. The fraudulent filings resulted in a total sustained tax harm of $525,404.
Wright will remain in custody pending her transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The IRS Criminal Investigation (IRS-CI) conducted the investigation. Assistant U.S. Attorneys Rodolfo Ramirez and James Hu prosecuted the case. IRS-CI is the criminal investigative arm of the IRS, responsible for conducting financial crime investigations, including tax fraud, narcotics trafficking, money laundering, public corruption, healthcare fraud, identity theft, and more. IRS-CI special agents are the only federal law enforcement agents with investigative jurisdiction over violations of the Internal Revenue Code, and they maintain a federal conviction rate exceeding 90 percent. The agency has 20 field offices located across the United States and 12 attaché posts abroad.
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