Brothers Sentenced for Claiming $224 Million in Fake Tax Refunds

GREENBELT, MD — Two brothers, one from Prince George’s County were sentenced to prison Tuesday for filing 46 fraudulent tax returns seeking refunds of more than $224 million.

Sean Aude Gallman, 39, of Upper Marlboro, was sentenced to 11 years in prison,and his brother, Eric Maurice Gallman, 42, of Huntersville, NC, was ordered to serve to four years in prison, both followed by three years of supervised release.

Both men previously pleaded guilty to conspiring to commit mail and wire fraud, mail fraud, and conspiring to commit money laundering. Sean Gallman also pleaded guilty to money laundering and aggravated identity theft.

A federal judge also ordered Sean and Eric Gallman to pay restitution to the IRS of $16.5 million and forfeit the amount of the refunds paid by the IRS, including $11.5 million seized from numerous bank accounts; foreign currency and gold and silver coins seized from a residence in Upper Marlboro; nine residential properties located in Upper Marlboro and Laurel, as well as in North Carolina and South Carolina; and two Mercedes-Benz vehicles and a Hyundai vehicle.

“These two criminals filed bogus tax returns claiming ‘refunds’ that were not owed, and stole over $16 million from the IRS,” said U.S. Attorney Rod J. Rosenstein.

According to court documents and evidence presented at the sentencing hearing, the Gallman brothers admitted that they established trusts and business entities, and used mailboxes at numerous private commercial postal carrier stores in Maryland and North Carolina as the addresses for the trusts and business entities. The defendants mailed fraudulent tax returns to the IRS in the names of the trusts and businesses requesting refunds.

For example, in January 2013, Sean Gallman mailed to the IRS a fraudulent 2012 tax return in the name of the Gallman Charitable Trust, requesting a refund of $8.2 million. Also around this time, the defendants mailed to the IRS a fraudulent 2012 tax return in the name of LEA Group Holdings Trust, requesting a refund of $8.2 million.

After receiving the multi-million-dollar refund checks, the men deposited the two refunds in bank accounts they controlled. To hide their receipt of these refunds, the defendants used cashier’s checks and other financial instruments to transfer a portion of the money to third parties and other bank accounts.

Altogether, the Gallman brothers filed an estimated 46 fraudulent tax returns seeking refunds totaling $224 million, for which the IRS paid two refunds totaling $16.5 million.