In a significant legal development that emphasizes the serious consequences of financial crimes, three Florida men—Christopher Johnson, Jasen Harvey, and Arthur Grimes—have pleaded guilty to their roles in a multimillion-dollar tax fraud scheme. This case, which revolves around the manipulation of the IRS’s tax refund system, highlights the importance of financial integrity and the severe penalties associated with tax-related offenses.
The “Note Program” Tax Fraud Scheme: A Sophisticated Deception
Between 2015 and 2018, Christopher Johnson and Jasen Harvey conspired to perpetrate a tax fraud scheme known as the “Note Program.” The scheme involved the preparation and filing of tax returns that falsely claimed large, nonexistent income tax withholdings. These fraudulent withholdings were then used to request substantial refunds from the IRS, leading to a significant financial loss for the federal government.
The conspirators targeted individuals who were looking to receive large tax refunds, offering to prepare their tax returns for a fee. The tax returns submitted by Johnson and Harvey claimed over $3 million in fraudulent refunds, with the IRS disbursing approximately $1.5 million before the scheme was uncovered. This sophisticated operation not only deceived the IRS but also exploited the clients who trusted these individuals with their financial information.
Christopher Johnson and Jasen Harvey charged their clients fees for their services, further profiting from the fraudulent activity. In addition to these fees, they required their clients to pay a portion of the fraudulent refunds they received. This dual revenue stream allowed the conspirators to accumulate significant wealth at the expense of both the IRS and their clients. The case exemplifies how individuals can be drawn into fraudulent schemes with the promise of financial gain, only to find themselves embroiled in criminal activity.
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Roles of Christopher Johnson, Jasen Harvey, and Arthur Grimes
Christopher Johnson was a key figure in the scheme, playing a central role in the preparation and submission of the fraudulent tax returns. He personally profited by more than $300,000 over the course of the scheme, receiving over $200,000 in 2016 and an additional $100,000 in 2017. However, Johnson failed to report this income on his tax returns, leading to a tax loss of $78,259. This failure to report illicit income is a common tactic in tax fraud cases, as perpetrators seek to conceal the full extent of their criminal activity.
Jasen Harvey, who worked closely with Johnson, was responsible for preparing the false tax returns that formed the basis of the scheme. Harvey’s role was critical in ensuring that the fraudulent claims were convincing enough to secure the refunds from the IRS. Although the specific financial gains Harvey received from the scheme are not detailed in the court documents, his involvement was crucial to the success of the operation. The collaboration between Johnson and Harvey demonstrates how tax fraud schemes often rely on the combined efforts of multiple individuals working together to deceive the system.
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Arthur Grimes, who had previously pleaded guilty on April 2, played a different role in the scheme. Grimes was involved in having four false income tax returns prepared by Jasen Harvey and filed with the IRS. When the IRS attempted to recover one of the fraudulent refunds issued based on these returns, Grimes actively obstructed their efforts. He made false statements to an IRS revenue officer and submitted false documents in an attempt to conceal the fraud. Additionally, Grimes transferred funds to a nominee bank account, further complicating the IRS’s ability to trace the money. His actions illustrate the lengths to which some individuals will go to protect themselves from detection and prosecution.
Legal Consequences and Sentencing
The legal consequences for Christopher Johnson, Jasen Harvey, and Arthur Grimes are severe, reflecting the gravity of their offenses. Johnson and Harvey each face a maximum penalty of five years in prison for the conspiracy charge. In addition to potential prison time, they will also be subject to supervised release, restitution, and monetary penalties. The restitution payments are intended to compensate the IRS for the financial losses incurred as a result of the fraudulent scheme.
Arthur Grimes, who faces a maximum penalty of three years in prison for obstructing the IRS, is scheduled to be sentenced on November 12. His sentence will also include supervised release and financial penalties. The court will consider the U.S. Sentencing Guidelines and other statutory factors when determining the final sentences for all three defendants. These guidelines take into account the severity of the offense, the financial impact on the government, and the defendants’ prior criminal history.
The prosecution of this case has been led by the IRS Criminal Investigation Division, with assistance from Trial Attorneys Melissa Siskind, Jeffrey McLellan, and Caroline Pearson of the Justice Department’s Tax Division and Assistant U.S. Attorney Diane Hu for the Middle District of Florida. Their efforts have been instrumental in bringing Christopher Johnson, Jasen Harvey, and Arthur Grimes to justice.
