Detroit man sentenced to prison in tax scheme

Mark Hicks
The Detroit News

A Detroit man is headed to prison for working to defraud the federal government and helping file false tax returns, federal officials announced Tuesday.

Jawwaad Muhammad, 31, was sentenced to 24 months in federal prison, to be followed by two years of supervised release for his role in the scheme.

According to court records, he and co-conspirator Isa Ford operated two tax preparation businesses in Detroit: the Tax Advance and Lady Liberty Taxes.

“The pair prepared and filed tax returns that included fabricated household help wages in an effort to maximize their clients’ earned income tax credit,” the U.S. Attorney’s Office said in a statement. “They agreed with the filers to have the refunds deposited into bank accounts under Muhammad and Ford’s control. The filers were provided a cashiers’ check or cash but Muhammad and Ford retained a substantial portion of the refund for themselves.”

In all, investigators accuse the two of filing tax returns claiming more than $374,000 in fraudulent refunds.

“Most tax return preparers provide an important and valuable service to their clients. However, there are some such as Mr. Muhammad that seek to enrich themselves at the expense of U.S. taxpayers,” said Manny Muriel, Special Agent in Charge, Internal Revenue Service – Criminal Investigation, in a statement. “Today’s sentence serves as a loud and clear message of the consequences for defrauding America’s tax system.”

U.S. District Court Judge Stephen J. Murphy III imposed the sentence. Muhammad was ordered to pay $374,636 in restitution to the IRS and is barred from employment or voluntary involvement in tax preparation.

Ford, 35, of Detroit was sentenced in April to 27 months in prison followed by two years of supervised release. He also was ordered to pay $374,636 in restitution to the IRS and not work in tax preparation.