Criminal Justice News

Friday, August 12, 2016

Two Kentucky Men Sentenced to Prison for Stolen Identity Refund Fraud



Two Kentucky men were sentenced to between five and more than six years in prison today after pleading guilty in April and May to conspiring to defraud the United States, wire fraud, and aggravated identity theft, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division, and U.S. Attorney Kerry B. Harvey of the Eastern District of Kentucky.

Billy Ray Hamilton and Brian Hamilton were sentenced to serve 60 months and 82 months in prison, respectively.  According to court documents, during the years 2011 and 2012, the Hamiltons conspired with others at the Bailey Switch Pawn Shop in Knox County, Kentucky, to submit false income tax returns to fraudulently obtain tax refunds.  The Hamiltons prepared and electronically submitted to the Internal Revenue Service (IRS) numerous false federal tax returns.  In some cases, they used the identification information of customers of the Bailey Switch Pawn Shop, without their knowledge or consent.  In other cases, they obtained taxpayers’ information through a co-conspirator.

“Stolen identity refund fraud damages not just the US taxpayer, but also the individuals whose identities are stolen, privacy invaded, and lives turned upside down,” stated Principal Deputy Assistant Attorney General Ciraolo.  “The Department will continue to prosecute offenders such as Billy Ray Hamilton and Brian Hamilton, while at the same time working with the IRS to prevent these crimes from occurring in the first place, by supplying the IRS with real time information on how fraudsters are operating, thereby enhancing the IRS’s capacity to spot phony returns when they are filed and prevent fraudulent refunds from ever being issued.”

“The sentences handed down today highlight the seriousness of the defendants’ conduct,” said Special Agent in Charge Tracey D. MontaƱo of IRS’s Criminal Investigation (CI) Nashville Field Office.  “We will remain vigilant in identifying and investigating those who seek to defraud the American taxpayers by stealing identities and filing false tax returns.”

In addition to the prison terms, U.S. District Judge Amul R. Thapar of the Eastern District of Kentucky ordered Billy Ray Hamilton to serve three years of supervised release and pay restitution to the IRS in the amount of $272,808.98.  Judge Thapar ordered Brian Hamilton to serve three years of supervised release and pay restitution to the IRS in the amount of $221,728.74.

On July 12, co-conspirator Patsy Carnes was sentenced to 22 months in prison, and co-conspirator Diana Hill was sentenced to 16 months in prison, for their roles in the scheme.

Principal Deputy Assistant Attorney General Ciraolo and U.S. Attorney Harvey commended special agents of IRS – CI, who investigated the case, and Assistant U.S. Attorney Neeraj Gupta of the Eastern District of Kentucky and Trial Attorney Abigail Burger Chingos of the Tax Division, who prosecuted the case.

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