Brothers Admit Seeking $218 Million in Fake Tax Refunds

GREENBELT, MD — Two brothers, one from Prince George’s County, deposited $16 million in bogus income tax refunds, say federal prosecutors, who are seeking 20-year prison sentences for the pair.

Sean Aude Gallman, 39, of Upper Marlboro and his brother, Eric Maurice Gallman, 42, of Huntersville, NC, pleaded guilty Tuesday to a conspiracy to commit mail and wire fraud, mail fraud, and conspiracy to commit money laundering, arising from a scheme in which they filed 30 fraudulent tax returns seeking refunds of more than $218 million.

Sean Gallman also pleaded guilty to aggravated identity theft and money laundering.

“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 37 fraudulent tax returns seeking refunds totaling $218 million, for which the IRS paid two refunds totaling $16.5 million.

The government seeks the forfeiture of the two 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, plus locations in North Carolina and South Carolina; and two Mercedes-Benz vehicles and a Hyundai vehicle.

The defendants face a maximum sentence of 20 years in prison for conspiring to commit mail and wire fraud, conspiring to commit money laundering, and mail fraud.

Sean Gallman also faces a maximum sentence of 20 years in prison for an additional count for mail fraud and for money laundering; and a mandatory minimum of two years in prison consecutive to any other sentence imposed for aggravated identity theft.

Sentencing is scheduled for May 17.