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Jersey Tax Preparer Pleads Guilty in Tax Scheme

An employee at a New Jersey tax prep business has pleaded guilty to helping prepare fraudulent tax returns using names and Social Security numbers stolen from two dozen people.

Darlene Covington, 32, prepared taxes at KCJ Financial Corp., in Irvington, N.J. According to prosecutors, she used personal identification information, such as names and Social Security numbers, for 24 people to prepare fraudulent tax returns without their knowledge or consent. An uncharged co-conspirator would receive the tax refunds. Covington allegedly used the false tax returns to secure Refund Anticipation Loans from various banks, receiving a $235 fee for each loan. The fraudulent returns led to a tax loss of approximately $106,732 to the federal government.

Covington pleaded guilty in a federal court in Newark, N.J., last Tuesday and is scheduled to be sentenced in October. She faces up to three years in prison

“IRS-Criminal Investigation stands ready to investigate anyone who would put a taxpayer at risk for a quick profit,” said Jonathan D. Larsen, special agent in charge of IRS-Criminal Investigation’s Newark Field Office, in a statement. “Ms. Covington’s plea today shows that protecting taxpayer money is a matter IRS-Criminal Investigation takes extremely seriously.”

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