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Lewisville man and woman arrested for tax fraud
By Heather M. Goodwin and Marthe Stinton, hgoodwin@starlocalnews.com
A Lewisville couple was arrested Tuesday on multiple counts of federal income tax violations.
Michael Jerome Edwards, 39, and Cheri Joann Edwards, 37, both of Lewisville, were indicted Sep. 12 on charges of conspiracy to defraud the government, five counts of submitting fraudulent claims and two counts of corrupt interference with the IRS. On Tuesday, Michael Edwards was arrested in The Colony, and Cheri Edwards was arrested in Lewisville.
According to the indictment, from Nov. 20, 2008 through at least April 3, 2009, Michael and Cheri Edwards are alleged to have fraudulently claimed more than $3.8 million in tax refunds for tax years 2006 through 2008. Michael and Cheri Edwards were issued more than $401,000 in tax refund checks from the IRS, according to the indictment.
The indictment states that around Jan. 6, 2009, Michael Edwards filed a fraudulent 2006 tax return mailed from The Colony, claiming a $2.2 million tax return. In support of that claim, he also filed multiple fraudulent 1099-OID forms.
Around Nov. 20, 2008, the indictment states that Michael Edwards filed a fraudulent 2007 tax return also mailed from The Colony, claiming more than $419,000 in tax returns. Again, he filed a fraudulent 1099-OID form, according to the indictment.
In response to his 2007 tax return, the IRS issued Michael Edwards a tax refund check for roughly $324,536.
In 2009, Michael Edwards filed another fraudulent tax return, according to the indictment. The document states that around May 8, he filed a fraudulent 2008 tax return claiming a refund of more than $704,000. In support of that tax return, Michael Edwards is alleged to have falsified a Schedule B and Form 1040.
According to the indictment, around April 3, 2009, Cheri Edwards filed a fraudulent 2006 tax return mailed from The Colony, claiming more than $431,000 in tax refunds. Around that same time, she filed fraudulent 1099-OID forms in support of her tax return, according to the indictment.
The indictment also states that around the same time, Cheri Edwards filed a fraudulent 2008 tax return also mailed from The Colony, claiming more than $77,400 in tax refunds. She then filed a falsified Schedule B and Form 1040 according to the indictment.
In response to her 2008 tax return, the IRS issued Cheri Edwards a tax refund check for roughly $77,451.
In addition to the fraudulent tax returns, Michael and Cheri Edwards are alleged to have submitted multiple fictitious money orders, sometime between April 2009 and February 2010, in an attempt to pay back the IRS before they were indicted.
If convicted, Michael and Cheri Edwards each face up to 10 years in federal prison for the conspiracy charge, up to five years for each of the fraudulent claims charges and up to three years for each of the corrupt interference with the IRS charges.
While not discussed in open court, Davilyn Walston, public information officer for the U.S. Attorney's office in the Eastern District of Texas, said she was told Michael and Cheri Edwards are now divorced.
The IRS also announced last week that a resident of The Colony pleaded guilty on Aug. 23, 2012, to submitting a fraudulent claim.
On or around June 1, 2009, Jennifer L. Upchurch, 31 submitted an original issue discount to falsely identify federal income tax withholdings, the government entity said.
Upchurch was indicted on Dec. 15, 2011, and charged with submitting a fraudulent federal income tax return for the 2008 tax year.
In response to her false claim, Upchurch received a tax refund of $85,843 which she was not entitled, according to documents presented in court.
Documents given by the IRS said Upchurch submitted the claim for the tax refund and "deliberately closed her eyes to what was an otherwise obvious fact, which was that the claim for the refund was false."
Upchurch knowingly and intentionally caused the OID form to be filed that falsely reported that federal income taxes of $109,116 were withheld to be held, according to documents.
In response to her tax return, the Department of Treasury transferred a tax return of that amount by wire to Upchurch's Chase Bank checking account. Within a week of the deposit, she withdrew a total of $75,000 from her checking account from multiple banks in the Eastern District of Texas and other locations.
Between Feb. 22, 2010, and March 24, 2011, Upchurch mailed three letters to the IRS demanding 19 proofs of claim in response to IRS correspondent that attempted to collect the excess tax refund that she should not have received.
Upchurch faces up to five years in federal prison. A sentencing date has not been set.
Walston said whether or not Upchurch had any sort of relationship with either Michael or Cheri Edwards has not been discussed in open court.
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Financial ICONN is the most effective way to prevent fraud. If the IRS would activate the ICONN of anyone filing taxes, the IRS would know without a doubt that the right person is receiving the return. With ICONN, criminals have no way to impersonate someone else. "