District Briefing

CITY GOVERNMENT

Tax-Preparing Sisters Charged With Fraud

Two South Carolina sisters who ran tax-preparation businesses have been charged with pocketing about $700,000 in fraudulent tax refunds from the D.C. government, federal prosecutors said yesterday. Carolyne R. Jones, 50, and Johanna R. Jones, 47, were arrested last week on charges of wire fraud, mail fraud and identity theft. They are accused of submitting 173 fraudulent tax returns in the names of their clients to the D.C. government from 2005 through this year.

The government paid $720,328 in refunds, but the clients never saw a dime because the sisters told the government to deposit the refunds into bank accounts they controlled, authorities said. To conceal the refunds, authorities said, the sisters provided incorrect addresses on the tax returns.

Investigators said a postal worker forwarded incorrectly addressed forms last year to one of the sisters' former clients. After reading that she had received a $4,290 refund in 2007, the client called D.C. authorities to report that she had never sought or received a refund, according to court papers filed by Judy Ramos, a postal inspector.

-- Del Quentin Wilber