Tax scam run by Fla. inmate milked IRS of bogus refunds

September 16, 1994|By Fort Lauderdale Sun-Sentinel

FORT LAUDERDALE, Fla. -- Some prison inmates spend their days behind bars pumping iron.

Daniel Naple attempted to pump $800,000 out of the Internal Revenue Service while paying his debt to society. Now he could get as much as 10 more years in the Big House.

Naple, 43, of Savannah, Ga., was one of three men charged with operating what prosecutors say was a massive income tax fraud that was run, in part, from the law library at the Glades Correctional Institution in Belle Glade.

The prison-based scam operated in 1989 and 1990 with the cooperation of hundreds of inmates at three different Florida prisons. It yielded $67,647.90 in undeserved IRS refund checks before federal agents shut it down, said Assistant U.S. Attorney Stephen Carlton.

Yesterday, Naple appeared before U.S. District Judge William Zloch in federal court in Fort Lauderdale and admitted his part in the scam. He agreed to repay the $67,647.

He told the judge that he learned the scheme from fellow inmate Milton Niport, who died in prison of natural causes in 1989. Naple, who was serving time for burglary and grand larceny, said Niport told him he had been getting fraudulent tax returns using inmate's names since 1980.

Naple said Niport persuaded him to participate in the tax refund operation.

"All I was doing was signing the bottom of the 1040As," he said, referring to the federal tax forms. He said he signed the prisoner's names asking for refunds.

"Most of [the prisoners] were getting 50 percent of what was made" from the fraudulent returns, he said.

The fake W-2 wage forms were filled out with employer identification numbers obtained from a Jacksonville, Fla., stock broker, he said. The broker has not been charged.

Other forms were obtained by Robert Kirsch, 43, of Maxville. Kirsch, who was not an inmate, also has pleaded guilty in the case. He is to be sentenced Oct. 14.

Kirsch helped smuggle the completed tax and employment forms out of the prison and mailed them to the IRS, Naple said.

He also set up post office boxes to receive the refund checks. And he hired another man, Philip Nelson, 49, of Lantana, Fla., to pick up and cash the refund checks. Nelson pleaded guilty. He was sentenced last month to five years of probation and was ordered to pay restitution of $24,661.

Naple said he was transferred to a prison outside Florida in early 1990 and lost contact with the scam.

But he said Kirsch attempted to expand too rapidly, recruiting prisoners at the Polk Correctional Institution in Polk City, Fla., and the Zephyrhills Correctional Institution in Zephyrhills, Fla.

"It just blew up and started going crazy," said Naple. "That's why I'm standing here now."

Naple said that in exchange for his help he would get a "female visitor" every week arranged by Kirsch. He said vodka and marijuana were smuggled into the prison for him.

In addition, Naple said he also was supposed to receive $10,000 over two years when he was released from prison. But he said he never got the money.

Naple is to be sentenced Nov. 18.

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