(Des Moines, IA) -- An Ottumwa man and woman have been sentenced to prison, after pleading guilty to multiple fraud and tax-related charges. Investigators say the two ran a fraudulent tax-preparation business from 2018 to 2022, catering primarily to immigrants and refugees who worked at meat-packing facilities in Iowa. The clients had little or no ability to read, write, or speak English.
Forty-seven-year-old Thein Maung of Ottumwa was sentenced to 12-years in prison after pleading guilty to 49 fraud and tax-related charges. Twenty-one-year-old Phyo Mi of Ottumwa was sentenced to 1 to nine years in prison after a jury convicted her of sixteen fraud-related charges.
Investigators say the fraud conducted by the two resulted in nearly $4 million in losses to the Internal Revenue Service, Iowa Workforce Development, and numerous Iowa citizens.
According to public court documents and evidence presented at trial Maung and Mi ran a fraudulent tax-preparation business out of their family’s Ottumwa home, and accepted cash in exchange for preparing tax forms.
Investigators say Maung and Mi included fraudulent items on their customers’ federal tax returns, like false claims for residential energy credits, business-expense deductions, or moving-expense deductions for members of the United States Armed Forces.
Those returns claimed over $3.5 million in fraudulent residential energy credits. It is estimated that from 2018 to 2022, Maung and Mi received over $200,000 in cash fees
from their customers. In addition, on their customers’ returns, Maung and Mi sometimes directed that portions of the fraudulent refunds be sent to financial institution accounts accessible to Maung
and Mi. As a result, Maung and Mi obtained nearly $50,000 in fraudulent tax refunds.
Maung and Mi also offered to help customers with applying for unemployment benefits from Iowa Workforce Development. Without their customers’ knowledge or approval, Maung
and Mi submitted materials to Iowa Workforce Development directing that their customers’ benefits payments be sent to financial institution accounts that Maung and Mi had access to.
Maung and Mi obtained nearly $70,000 in fraudulent unemployment insurance benefits payments be sent from Iowa Workforce Development to their accounts, instead of to eligible claimants.
Chief United States District Court Judge Stephanie M. Rose described Maung and Mi’s fraud as being elaborate and extensive, involving layers of subterfuge, and
victimizing hundreds of vulnerable immigrants and refugees with little education and limited English fluency.
Following their prison terms, Maung and Mi will be on supervised release for three years.
There is no parole in the federal system.
“This sentence should send a strong message to any return preparers who are looking to
cheat innocent taxpayers and the U.S. government that a prison cell awaits them,” said Special
Agent in Charge Thomas F. Murdock, IRS Criminal Investigation (CI), St. Louis Field Office.
“Maung and Mi preyed on people who were vulnerable. CI special agents do not take this kind of
fraud lightly. Our law enforcement partners worked diligently to help us bring these two to
justice.”