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Two Found Guilty in State Income Tax Refund Fraud Scheme

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John.Barrett@ftb.ca.gov

For Immediate Release

10.05.2010

Sacramento – Two Los Angeles men were found guilty for their roles in an income tax refund fraud scheme that defrauded the state out of more than $500,000, the Franchise Tax Board (FTB) announced.

Kessler “Corky” Wyatt, 68, was found guilty of fourteen counts of state income tax fraud, two counts of negotiating fraudulent state income tax refund checks and one count of grand theft.

Frederick Johnson, aka Fredrick Johnson aka Keg Johnson, 70, was found guilty of three counts of state income tax fraud, two counts of negotiating fraudulent state income tax refund checks and one count of grand theft.

According to court documents, Wyatt was a self-employed job placement recruiter, who used his knowledge of payroll systems and recruiting skills to create the refund fraud scheme. During 1999 - 2002, Wyatt prepared and filed false wage and withholding statements. He then recruited Johnson to file fraudulent state income tax returns resulting in the fraudulent refunds being issued. Wyatt spent most of the money on maintaining his lavish lifestyle.

Wyatt’s sentencing date is scheduled for November 4. He faces up to 12 years in state prison.

Johnson’s sentencing date is scheduled for October 15. Restitution representing the fraudulent refunds, penalties, interest, and the cost of the investigation will also be ordered.

Los Angeles County Superior Court Judge Kathleen Kennedy presided over the jury trial September 21 in Department 109 of the Clara Shortridge Folz Criminal Justice Center. Los Angeles County Deputy District Attorney James Belna prosecuted the case.

For more information on other taxes and fees in California, visit taxes.ca.gov.

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