August 26, 2000|By Eric Siegel | Eric Siegel,SUN STAFF
A 27-year-old Baltimore man was sentenced yesterday in federal court to 18 months' probation for fraudulently cashing $24,061 in tax refund checks intended for others, in a case stemming from what investigators have described as a major IRS blunder.
U.S. District Judge Andre M. Davis ordered William S. Broaddus III of the 3200 block of Cliftmont Ave. to serve 10 months of his sentence on home detention and to repay the money to the federal treasury. Broaddus pleaded guilty to one count of bank fraud as part of an agreement with prosecutors.
Although Davis said he didn't believe the case warranted a prison term, the judge told Broaddus: "What you did was just so stupid, it just boggles the mind. ... You're going to be stuck with a federal felony conviction."
Broaddus' case was one of two criminal cases that grew out of the Internal Revenue Service erroneously sending hundreds of corporate refund checks to a Charles Village rowhouse for nearly a decade.
In one case, James Elwood Lewis Jr., a former IRS revenue officer, pleaded guilty earlier this month to bank fraud for cashing more than $160,000 in tax refund checks mistakenly mailed to a tax preparation business he opened in 1989 at 2429 St. Paul St.
The checks were made out to clients Lewis represented when he worked in the mid-1980s for a payroll and accounting firm. Lewis is scheduled to be sentenced in October.
Even after Lewis closed his St. Paul Street office in 1994, the IRS refund checks kept coming to the address.
According to court papers and testimony, prosecutors contend that Amos C. Benning Jr., who lived at 2429 St. Paul St. in the late 1990s, received several of the checks and decided to steal them, with the help of Broaddus and two other men.
Benning has pleaded not guilty to bank fraud charges.
In his plea agreement and in a statement in court yesterday, Broaddus admitted that he deposited eight checks totaling $24,061 he received from Benning into a corporate account at Crestar Bank he maintained for his cell phone and pager business in return for about 10 percent of the proceeds.
Broaddus, who described Benning as a business customer, acknowledged he had made a "bad decision" and apologized.
Assistant U.S. Attorney Andrew C. White said in court that the IRS still did not know exactly how many checks were mistakenly sent to the St. Paul Street address.
In response to questions from Davis, White said he knew of no effort by the government to recover the fraudulently-cashed money from the bank, intimating that because of the IRS error, such recovery was problematic.
Of the two other men charged in the case with Benning and Broaddus, Andrew D. Jackson has pleaded not guilty and Jacques Lee Smith is scheduled to plead guilty next week, court records show.
Sun staff writer Gail Gibson contributed to this story.
