A Kansas City woman who worked for the Internal Revenue Service pleaded guilty in federal court Friday to a tax fraud scheme that used addresses in Independence and Oak Grove as part of her conspiracy.
Taylor S. Knight, 32, of Kansas City, pleaded guilty to a conspiracy to steal txpayer indentity information in order to receive fraudulent tax refunds.
Knight was an employee of the IRS office on Pershing Road in Kansas City and admitted to using her position to illegally access the information of three taxpayers as part of the conspiracy.
For one of the victims, Knight submitted a bogus online application for a prepaid debit card that was approved and mailed to an address in Oak Grove. The debit card was never used. Knight admitted she submitted a false online application to test whether the scheme would work.
On Sept. 30, 2011, Knight used information from two of the taxpayers – both of whom were married – to submit a bogus online application for three prepaid debit cards. The cards were issued and mailed to the residence of the grandmother of her boyfriend, which he then retrieved from the mail.
On Oct. 17, 2011, Knight submitted a falsified 2010 tax return for the two married taxpayers. The IRS approved a $46,572 refund, of which $5,000 was deposited on a debit card that had been obtained by her. The IRS attempted to deposit the remaining $41,572 on the other debit cards obtained by Knight, but the banks rejected the deposits.
Knight admitted that her boyfriend telephoned the IRS and falsely claimed to be the victim taxpayer. He allegedly provided the IRS with personal identification information for both victims and requested the IRS to send the remaining tax refund to a new address located in Independence, which was his former residence that he knew was unoccupied.
In August 2011, the victim taxpayers filed legitimate amended tax returns. A $46,734 refund check was sent to the Independence address and was obtained by Knight. Knight admitted that she paid a second co-conspirator $500 to help her cash the refund check. Knight obtained false identification documents – including Social Security cards, credit cards and driver’s licenses – so that they could assume the identity of the victim taxpayers.
They attempted to cash the stolen Treasury check at a local convenience store. The clerk was concerned about cashing such a large check and he went to his immediate supervisor for guidance. They told the clerk and his supervisor that, if they would cash the check, they could keep $6,000 of the proceeds. The supervisor decided not to cash the check, but he told them to come back later. When Knight and her co-conspirator returned, the owner reported the incident to law enforcement. Police officers arrived about 10 minutes later and they were arrested.
Knight could be sentenced to as much as five years in federal prison without parole and a fine of up to $250,000 and an order of restitution.