Tax Fraud/Identity Theft Scheme Orchestrated from Michigan Prison
On September 5th, the Attorney General of Michigan issued the following press release. This demonstrates that one can never underestimate the creativity of the criminal mind.
Michigan Attorney General Mike Cox announced that Dale Morris, an inmate at the Hiawatha Correctional Facility in Kinross, Michigan, was sentenced to a term of 5 to 20 years in the Chippewa County Circuit Court by 50th Circuit Court Judge Nicholas Lambros.
Morris was convicted of maintaining a sophisticated criminal enterprise that he orchestrated from his Michigan prison cell. Morris' scheme enlisted the help of two fellow Michigan inmates, Darius Moye and Richard Custer, their mothers, Mary Moye of Georgia and Linda Custer of Detroit, David Bullard of Inkster, and Sherry Drake of Detroit and involved the attempted use of thousands of stolen names and social security numbers, including several hundred stolen from the St. John's Medical System in Detroit, to defraud Michigan taxpayers out of hundreds of thousands of State tax dollars. The hospital records were later seized in Georgia in Ms. Moye's home.
"The sheer brazenness of this criminal enterprise is incredible," Cox said. "It just goes to show that law enforcement always has to be vigilant."
"I want to compliment the Michigan State Police and the U.S. Postal Inspectors for their help in investigating this scam and completing the work before the State of Michigan lost any money. I also want to compliment St. John's Medical System for their cooperation and assistance in this investigation. The hard work and cooperation by all these offices helped keep our State's taxpayers from being defrauded out of hundreds of thousands of their hard-earned dollars," Cox added.
Morris, in prison as a 4th Habitual Offender (convicted of 3 prior felony convictions), was the ringleader of the scheme to fraudulently obtain Homestead Property Tax refunds that were intended for low income renters. While in prison, Morris' directed his co-conspirators to file hundreds of false homestead property tax claims with the Michigan Department of Treasury. These fraudulent filings, which used stolen names and social security numbers, claimed to be low income renters in Detroit. Hundreds of Michigan Treasury check "refunds" were in the process of being sent to various addresses in Detroit, many of which were non-existent, but all had a change of address form filed with the U.S. Post Office directing the checks to a Livonia P.O. Box. Incredibly, the P.O. Box was rented by Exarch Management Consultants - which was incorporated by Morris while he was in prison.
Fortunately, U.S. postal carriers noticed the large number of Treasury checks going to the Livonia P.O. Box and alerted authorities. The Michigan State Police, U.S. Postal Inspectors, and the Michigan Attorney General's Office unraveled the scheme quickly and charged all participants with Maintaining a Continuing Criminal Enterprise, a 20-year felony, and Filing False Tax Claims, a 5-year felony. When the defendants were arrested, thousands of additional tax claims were in the process of being filed. Had this fraud continued, the defendants would have defrauded the State of hundreds of thousands of dollars. Due to the quick action by the investigative team, the State suffered no loss.
All the other defendants have been sentenced. David Bullard pled guilty to 2 counts of Forgery and Uttering and Publishing, both 14-year felonies. He was sentenced on 6/20/06 to 6 months jail. Richard Custard pled guilty to Tax Fraud, a 5-year felony, as a 3rd Habitual Offender and was sentenced on 8/2/06 to 1 year to 10 years in prison. This sentence is consecutive to the prison term he is already serving. Linda Custard pled guilty to Forgery and Filing a False Tax Return and was sentenced on 6/21/05 to 3 months jail. Mary Moye pled guilty to Tax Fraud and was sentenced on 6/20/05 to 3 months jail. Sherry Drake pled guilty to Uttering and Publishing and Filing False Tax Returns and was sentenced on 6/20/06 to 3 months jail. Darius Moye pled guilty to 2 counts of filing false Tax Returns as a Habitual 3rd Offender and was sentenced on 6/20/05 to 1½ years to 10 years in prison consecutive to the prison term his is already serving. 
