A Pennington Gap man charged with defrauding the IRS will serve 51 months in prison, according to the U.S. Attorney's Office.
TimesNews reported that William Ziehler previously pleaded guilty to one count of conspiracy to defraud the government. Wednesday, Ziehler was sentenced to 51 months in prison, to be followed by three years of supervised release.
According to evidence presented in District Court, Ziehler and others participated in a sophisticated conspiracy to defraud the federal government. The scheme began when an inmate at a Tennessee state prison gathered personally identifiable information (including birth dates and social security numbers) belonging to other inmates, which he then used to complete Internal Revenue Service (IRS) Form 1040s.
The Form 1040s contained false information, including false addresses outside of prison and false claims that the inmates were due a tax refund based on wages they never earned.
The attorney's office said that the Form 1040s were sent to persons outside of the prison who then forwarded the Form 1040s to the IRS for processing. Based on these Form 1040s, the IRS issued tax refund checks in the names of these inmates. Many of the tax refund checks were cashed at banks throughout Southwest Virginia by persons using fraudulent power-of-attorney forms.
Among other conduct, Ziehler has admitted to mailing false tax returns to the IRS and cashing the resulting tax refund checks using fraudulent power-of-attorney forms, the attorney's office.