WASHINGTON – The United States has filed a civil injunction lawsuit seeking to shut down Mo' Money Taxes, a Memphis, Tenn., based tax-preparation chain that at one time operated as many as 300 offices in 18 states, the Justice Department announced today. The United States accuses Mo' Money Taxes and its owners, Markey Granberry and Derrick Robinson, and store manager Eumora Reese of creating and maintaining a business environment that encourages the preparation of fraudulent federal income tax returns.
The government suit alleges that the defendants promote a culture that favors volume and profits over accuracy and integrity, and creates an environment where fraudulent return preparation and tax-law violations flourish. According to the complaint, Mo' Money Taxes' managers, licensees and employees prepare fraudulent returns that cause their customers to incorrectly report their federal tax liabilities and underpay their taxes and charge customers bogus and unconscionably high fees.
The complaint alleges that the defendants style themselves as savvy marketers and promoters of the Mo' Money Taxes brand and image – as evidenced by their commercials – and that Granberry and Robinson decided to change the business's name following bad publicity in 2012 surrounding customer allegations that Mo' Money Taxes failed to provide tax refunds to customers in a reasonable amount of time, if at all. According to the complaint, Granberry and Robinson now do business under the name Marquis Taxes and, along with Reese, under the name Southern King Taxes.
According to the complaint, the defendants encourage Mo' Money preparers to:
Falsely claim the earned-income credit;
Claim improper filing status;
Claim bogus education credits;
Improperly prepare returns using paystubs rather than employer-issued
Fabricate bogus W-2 forms;
File tax returns without customers’ consent;
Sell false and deceptive loan products; and
Charge deceptive and unconscionable fees.
The complaint cites alleged examples of Mo' Money Taxes customers in Memphis; Atlanta; Richmond, Va.; Jackson, Miss.; and Nashville, Tenn., whose returns had such fraudulent claims. The complaint also refers to several state-government actions related to Mo' Money Taxes' sale of refund-anticipation loans and charging of undisclosed or improper fees.
The complaint alleges that the estimated tax loss from fraudulent tax return preparation at Mo' Money Taxes offices in Memphis, Atlanta, Richmond and Jackson in 2011 exceeds $9 million.
Return preparer fraud, claiming false income or expenses to secure larger refundable credits such as the earned-income credit, and identity theft are among the IRS's "Dirty Dozen" Tax Scams for 2013.
"The nation's tax system relies on the integrity of tax preparers," said Kathryn Keneally, Assistant Attorney General for the Justice Department's Tax Division. "Most tax preparers are honest. We owe it to them and to all American taxpayers to use appropriate law enforcement tools to stop those who prepare fraudulent tax returns or who lure customers with deceptive loan products."
"Americans understand that the timely and equitable collection of tax revenues is essential to ensuring the financial security of our citizens and nation as a whole," said Edward L. Stanton III, U.S. Attorney for the Western District of Tennessee. "Those who abuse the tax filing process by fraudulently diverting public revenues into their own pockets are essentially stealing from every American and should expect to be held accountable to the fullest extent of the law."