Man gets 10 months in fraud case

More than $600,000 in IRS checks addressed wrongly were cashed

January 11, 2001|By Gail Gibson | Gail Gibson,SUN STAFF

A Baltimore County man was sentenced yesterday to 10 months in federal prison for his role in a bank fraud case described by authorities as the ultimate crime of opportunity born of an exceptional Internal Revenue Service blunder.

Jacques Lee Smith, 30, of Owings Mills must also serve three years of supervised release for helping to illegally cash tax refund checks worth thousands of dollars that the IRS mistakenly mailed to a Baltimore rowhouse where a friend of Smith's lived.

Court records show the tax agency wrongly mailed hundreds of corporate tax refunds during the 1990s to 2429 St. Paul St., which had once housed a private tax preparation business.

Smith was one of five men charged with bank fraud in U.S. District Court in the cashing of more than $600,000 in refund checks that arrived at that address. Court documents indicate that Smith helped investigators unravel the scheme after he was targeted as a suspect.

Smith helped co-defendant Amos Cedric Benning Jr. - a hairdresser who lived in a second-floor apartment at the St. Paul Street address - devise a plan to cash Treasury checks that arrived in the late 1990s, court records show.

Last year's federal indictment charged that Smith deposited four refund checks, totaling $23,446, made out to other businesses in the account for his own pager and cellular phone business, the now-closed Unisom Communications.

Smith pleaded guilty to bank fraud in August. He was sentenced by Senior U.S. District Judge Herbert N. Maletz, who said Smith would also have to pay restitution in an amount to be determined.

The investigation that led to the charges started after agents from the Secret Service and the Treasury Inspector General's Office for Tax Administration learned that Benning had deposited a $260,000 refund check made out to Jefferson Pilot Communications, a North Carolina-based company, records show.

Benning, now of Columbia, pleaded guilty in September to bank fraud and is awaiting sentencing. Another defendant, William S. Broaddus III of Baltimore, also pleaded guilty last year. He received 18 months of probation.

Andrew D. Jackson, described in court documents as a convicted drug dealer who co-owned Desired Image hair salon on East Hamilton Street with Benning, is awaiting trial on fraud charges. Jackson has pleaded not guilty.

In a related case, a former IRS revenue officer has pleaded guilty to bank fraud for illegally cashing refund checks that arrived at the rowhouse in the early 1990s.

James Elwood Lewis Jr., who had operated the tax business at the St. Paul Street rowhouse, was accused of forging endorsements on more than $160,000 in checks made payable to former corporate clients and depositing them in his accounts between 1991 and 1993.

As a tax preparer, Lewis had power of attorney to receive refund checks on behalf of roughly 3,000 corporations, court records indicate. When he closed his tax business, IRS computers failed to note that he no longer represented the companies and for years kept automatically sending refund checks to his former business' address.

Lewis, who pleaded guilty in August, is awaiting sentencing.

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