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Convict runs tax-return scam in prison; IRS loses $200,000

Updated: July 2, 2011 10:52PM

CAMDEN, N.J. — The IRS lost more than $200,000 in a phony tax-return scam run from a Camden prison cell, authorities say.

A convicted robber from Ocean County operated the scheme at Riverfront State Prison from September 2006 through early 2007, federal officials say. Jerry Julian, 47, submitted bogus returns — and usually got refunds — for more than 60 inmates at the North Camden prison, according to the U.S. Attorney’s Office for New Jersey.

Julian, formerly a kitchen worker from Seaside Heights, pleaded guilty last week to one count of aiding and assisting in the preparation of fraudulent returns, the federal prosecutor’s office said. Authorities said he charged inmates a fee to prepare phony returns for tax years 2003, 2004 and 2005.

Julian told fellow inmates the federal government paid minimum wage for the prisoners’ labor, and that they could claim a refund of employment taxes withheld. In fact, inmates make no more than $5 a day and no taxes are withheld, the U.S. Attorney’s Office said.

Julian said he helped file more than 110 returns, with falsified earnings and tax withholdings, that produced refunds of almost $215,000, officials said. Julian was serving a 10-year sentence for robbery when he operated the scam.

Gannett News Service

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