Michigan Siblings Guilty In $1.4M Phony IRS Refund Scheme

Three Michigan siblings plotted together to file more than 20 fraudulent income tax refunds for trusts requesting more than $1.4 million in refunds, the Justice Department said. The IRS paid out $940,000 the government got wise to their scheme, according to testimony during their 10-day trial in U.S. District Court in Ann Arbor that ended with guilty verdicts Thursday.

The two brothers and their sister — Anthony Gandy, Christopher Gandy and Sharon Gandy-Micheau — were convicted of multiple counts of identity theft, money laundering and mail fraud. They will be sentenced on Aug. 21.

According to evidence presented at trial, the siblings opened post office boxes and bank accounts to receive the refunds after filing fraudulent IRS Forms 1041, used by estates and trusts. The refunds were either quickly withdrawn once they were deposited in the bank accounts or, if they arrived by mail, cashed by a Detroit check cashing store, the government said.

Two witnesses testified at the trial that they had lost their identification and Social Security cards. The documents were either recovered at Gandy-Micheau’s residence or recovered from a computer there. Some of the phony tax returns were filed in the witnesses’ names, according to testimony.

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“These defendants attempted to steal taxpayer money, and they did so by using the identities of innocent victims,” U.S. Attorney Barbara McQuade said in a statement. “This case should signal the ability of IRS investigators to detect fraud and bring offenders to justice.”

The case was investigated by agents of the Internal Revenue Service – Criminal Investigation.

“Investigating refund fraud and identity theft remains a priority for IRS Criminal Investigation,” IRS-Criminal Investigation Special Agent in Charge Manny Muriel said in the statement. “Today’s guilty verdicts should send a clear message to would-be criminals that IRS-Criminal Investigation will continue to pursue those who prey on innocent victims and steal from the American tax system.”

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