Date: 10-24-2024

Case Style:

United States of America v. Michelle Denise Johnston

Case Number: 1:24-CR-32

Judge: Michael J. Truncale

Court: United States District Court for the Eastern District of Texas (Jefferson County)

Plaintiff's Attorney: United States District Attorney’s Office in Beaumont

Defendant's Attorney:

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Description:

Beaumont, Texas making and subscribing a false return and aiding and assisting in the preparation of a fraudulent returns criminal defense lawyer represented the Defendant.

Michaelle Denise Johnston, age 42, was a was a paid tax return preparer who was working at Allen and Johnston Tax Service (AJTS), in Beaumont. In 2011, Johnston and Yolanda Allen Morris formed AJTS. Each had worked as Jackson Hewitt Office Managers at different Wal-Mart locations and decided to open their own tax preparation business. AJTS existed until Allen and Johnston split in February 2021. Johnston requested refund amounts on customers’ tax returns that were not based on the customers’ actual income, expenses, deductions, and applicable qualifying credits. Instead, she illegally inflated refunds based on fabricated income, expenses, deductions, and credits reported by Johnston without her customers’ knowledge. Johnston then electronically submitted the fraudulent return information to the IRS via wire. The IRS deposited the tax refunds for Johnston’s customers with a third-party vendor. Johnston then caused the third-party vendor to pay the customers a modest tax refund she originally made known to them. Before the third-party vendor paid the customers, Johnston deducted what was essentially a second preparation fee from her customers refund, unbeknown to her customers. The amount of this second fee was generally the difference between the filed, larger tax refund and the modest tax refund originally made known to the customer. In addition, Johnston signed an income tax return that contained a written declaration that it was made under penalties of perjury. She falsely stated the amount of gross receipts knowing the statement was false. She also fraudulently stated taxpayers’ total expenses on tax returns knowing it was false.

This case was investigated by the Internal Revenue Service-Criminal Investigations and prosecuted by Assistant U.S. Attorney Reynaldo P. Morin.

Outcome: Defendant was sentenced to 15 months in prison and was ordered to pay $196,177.00 in restitution.

Plaintiff's Experts:

Defendant's Experts:

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