Tax Fraud Blotter: Friends in high places

Bold and arrogant; secure repeat business; questionable tax returns; and other highlights of recent tax cases.

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Skokie, Illinois: Former DeKalb County Schools Superintendent Devon Horton pleaded guilty to three federal charges in a case covering wire fraud involving kickbacks, misuse of school district money and tax evasion in 2022 at his former job in Illinois.

Sentencing is scheduled for Jan. 5, 2027.

The case stems from Horton’s time leading Evanston/Skokie School District 65 before he joined DeKalb County Schools in 2023. Prosecutors alleged he steered contracts to companies owned by three longtime friends, approved bills for services that were not provided, and received a portion of the district’s payments in return.

The school district funds charge involved using a district credit card in 2022 for personal meals, gift cards and vehicle expenses. The tax evasion charge involved concealing income and filing false tax returns for that year.

Horton was indicted in October 2025. He later resigned from DeKalb County Schools on Nov. 15, 2025.

Albany, New York: A New Jersey couple has been convicted in a nationwide fraud scheme that used taxpayer funds.

Jael Watts and Luis Pino-Copete were responsible for stealing more than $13 million.

Investigators said the New York Comptroller’s Office uncovered the scheme after a sham transportation company called Pearl Transit requested payments from the state.

Investigators determined that Pearl Transit was not a real company. They later found the fake company was submitting fraudulent billing claims to transportation and homeless service programs across multiple states.

The couple now face up to 20 years in prison on wire fraud charges. Their sentencing is scheduled for January.

Memphis, Tennessee: Former Shelby County Commission member Edmund Ford Jr. has been sentenced to 24 months in prison for federal tax evasion. Ford also faces two years of supervised release.

In early 2025, Ford was arrested following a federal indictment alleging a kickback and bribery scheme. Commission grant dollars were awarded to area nonprofits, in exchange for patronage at a Ford-owned business, E&J Computer Services and Repair. Over $250,000 was funneled to the company in the scheme.

Ford was also ordered to pay restitution. The amount will be set at a later date.That could amount to around 10% monthly of any income he earns.

During sentencing, the federal magistrate called Ford’s resignation letter from the commission “bold and arrogant.” He was required to resign from the body as a condition of his sentence. He was wrapping up his second and final term at the time charges were filed against him. Ford also is forbidden from holding public office again.

Ford’s parents accompanied him to the courthouse for sentencing. His father, Edmund Ford Sr., is currently a member of the Memphis City Council.

San Antonio: A San Antonio woman was sentenced to 53 months in prison for aiding or assisting in the filing of a false tax return.

Natasha Sheree Banks-Brown, 45, owned and operated a tax preparation business named Tasha’s Total Tax Service, beginning in 2016. In December 2020, IRS Criminal Investigations began investigating an increasing number of questionable tax returns prepared by Banks-Brown.

The investigation revealed that Banks-Brown filed individual tax returns on behalf of her clients which included false and fraudulent deductions and credits which significantly increased their tax refunds. Banks-Brown never quoted a specific price for her services and said that she would take her fee out of the return. As part of her fraudulent scheme, she used tax preparation software that allowed her to designate returns to be deposited into a bank account she controlled. The client would then receive a portion of the return via a transfer from Banks-Brown’s bank account to the client’s account, with Banks-Brown keeping a percentage as her fee.

Multiple clients testified at trial that they were unaware of her actions and were never given the opportunity to review the return in detail before signing. Evidence introduced at trial indicated that Banks-Brown filed close to 1,200 tax returns between 2017 and 2021 that resulted in over $8 million of refunds.

Tucson, Arizona: Darlene Musgrove, 68, of Tucson, a paid income tax preparer, was found guilty on 22 counts of preparing false federal income tax returns for her clients without their knowledge. Sentencing is scheduled for Feb. 23, 2027.

At trial, 12 of Musgrove’s clients testified that they did not have the deductions that she included on their tax returns and were not aware of the false deductions. They also testified that the refunds they received when Musgrove prepared their returns were larger than they had received in the past. The government alleged at trial that Musgrove’s intent was to acquire larger refunds for her clients so she could secure repeat business.

The total tax loss from the 22 false tax returns filed with the IRS is approximately $127,166.

A conviction for aiding and assisting in the preparation and presentation of false federal income tax returns carries a maximum penalty of three years in prison and a fine of $100,000, or both.

Yonkers, New York: A Yonkers tax preparer has admitted to falsifying tax returns over a five-year period that gave clients unearned tax deductions and cost the U.S. and New York nearly $6 million in unpaid taxes.

Joseph Clay, 52, of Lodi, New Jersey, pleaded guilty to aiding in the preparation of a fraudulent U.S. individual income tax return.

Clay operated Premier Tax and Professional Services and Prime Tax & Professional Services out of an office in the Ridge Hill development in Yonkers.

Clay filed more than 3,500 federal and state tax returns for the years 2018 through 2023 and routinely included false information such as fraudulent itemized tax deductions and fake claims for residential energy credits.

The IRS lost more than $5 million, which Clay has agreed to pay in restitution, and New York State tax authorities lost $900,000.

Clay faces up to three years in prison.

Trenton, New Jersey: Two more defendants have admitted to their roles in an $11 million conspiracy to defraud banks by depositing stolen checks and withdrawing the funds.

Raymond Wade, 43, of Morrisville, Pennsylvania, pleaded guilty on Sept. 28. Sentencing is scheduled for Dec. 17.

Dwayne Reddon, 40, of Trenton, New Jersey, pleaded guilty on Sept. 29. Sentencing is scheduled for Feb. 9, 2027.

Between July 21, 2026 and Aug. 4, 2026, eight other individuals pleaded guilty for their roles in the same conspiracy. Charges remain pending against Wayne Bessant, 45, of Hamilton, New Jersey, and Ryan Small, 33, of Ewing, New Jersey.

From March 2023 through June 2025, the defendants conspired to deposit stolen checks — including U.S. Department of Treasury checks — at various banks in New Jersey and Pennsylvania. The conspirators impersonated the businesses or individuals listed as payees on the stolen checks, often by acquiring business documents in the names of the payees.

Once the conspirators acquired fraudulent business documents or opened fraudulent bank accounts, they deposited the stolen checks and split the proceeds. In total, the conspirators deposited or attempted to deposit over 100 Treasury and commercial checks totaling over $11 million. Many of the Treasury checks were refunds issued as Employee Retention Credits.

The bank fraud conspiracy charge is punishable by a maximum potential penalty of 30 years in prison and also carries a fine of up to $1,000,000.