Welcome back to the Tax Crypt! Just when you got over last year’s terrifying tales, we’re back with a sequel. And just like any good horror franchise, this second installment offers three more weird tax stories with questionable decisions, bizarre behavior, and characters who really should have known better.
The taxpayers who couldn’t rest in peace
You know the old saying. Two things in life are certain: death and taxes. Brenda Knight and her husband, Willie Watkins, found a way to combine them into one very illegal family business.
The Detroit-area scheme also involved Brenda’s son, McAllen Knight, and McAllen’s sister, Adreann Turnage, along with accomplice Renita Adams. The group used the stolen identities of recently deceased people to file more than 700 fraudulent tax returns for tax year 2010. They claimed over $1.8 million in refunds using false claims for tax credits like the Earned Income Tax Credit and education credits. They directed the money to bank accounts set up just to receive the fraudulent funds.
Oddly enough, this wasn’t a high-tech operation. Some returns were filed using public internet connections at Starbucks and Red Roof Inns. Because nothing says sophisticated tax crimes quite like free hotel Wi-Fi.
The crew eventually pled guilty to charges of wire fraud and aiding and abetting in identity theft. In 2015, Brenda was sentenced to two years in prison. Adreann, McAllen, and Renita each received 18 months. Willie had already been sentenced to 30 months in April 2014. The five defendants were also ordered to pay $410,949 in restitution.
While death didn’t stop the returns from being filed, the prison sentences eventually did.
The Alabama “governor” and his hidden gold
Monty and Patricia Ervin ran a successful property management business in Dothan, Alabama, collecting more than $9 million in rental income over approximately one decade. Sounds great until you realize they didn’t pay a dime of federal income taxes.
When the IRS came looking for its money, the couple had an interesting reason for not paying taxes. They claimed to be sovereign citizens and weren’t bound by federal or state laws. They even filed paperwork renouncing their U.S. citizenship, with Monty declaring himself the “governor” of Alabama in one court filing. Unfortunately for him, you can’t just opt out of the government and its tax laws.
The couple concealed property through bogus trusts and trustees. Investigators later uncovered a $1.3 million beachfront condo purchased with cash, while prosecutors introduced evidence of $350,000 in gold coins reportedly buried in the couple’s yard. Monty was arrested in Florida with a notebook containing coordinates for an island off the coast of Honduras. This sounds like a great straight-to-DVD pirate film plot.
In 2011, the Ervins were found guilty of one count of conspiracy to defraud the United States and three counts of tax evasion. The following year, Monty received 10 years in prison, while Patricia got five years of probation, including 40 consecutive weekends in jail. The couple was ordered to pay about $1.4 million in restitution. Sadly, appointing yourself governor doesn’t make you exempt from paying your taxes.
And if you thought burying gold was an unusual way to hide assets, you don’t want to miss our final bizarre tax tale.
Find out how one man took destroying evidence to a whole new level
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When tax fraud gets hard to swallow
Ogiesoba City Osula of Dallas was involved in a massive tax fraud scheme. He and his accomplices used stolen personal information to file fraudulent tax returns, raking in millions that were deposited to bank accounts and prepaid debit cards.
In November 2011, a drug dog alerted police to a car near Cincinnati. Inside the vehicle was Osula, his accomplice George Ojonugwa, and a leader of another fraud ring. Police also discovered $300,000 in cash and money orders, plus numerous debit cards in the vehicle. Then, things got weird.
While sitting in a police car waiting to be questioned, Osula ate one of the debit cards. He didn’t throw it. He didn’t hide it. He ate it. And while this might have worked as a weird party trick, it didn’t stop Osula from catching charges.
He was convicted on multiple felony charges in 2013, including seven counts of presenting fraudulent claims upon the U.S. and six counts of aggravated identity theft. He was sentenced in 2014 to 17.5 years in federal prison, plus ordered to pay nearly $16 million in restitution. Turns out that eating the evidence didn’t make the charges any easier to digest.
These tax fraud cases prove that real life can outdo even the strangest Hollywood horror script. For three more crazy but true tales, check out last year’s IRS Horror Stories: Three True Tales from the Tax Crypt.
