PHILADELPHIA - Modestine Gillette, a/k/a/ “Cookie,” 48, of Philadelphia was sentenced today to twelve months and one day imprisonment for carrying out three separate schemes that defrauded her former employer – the Internal Revenue Service (“IRS”). Gillette pleaded guilty on November 6, 2015.
Between October 2008 and March 2012, Gillette was employed on an as needed basis by the IRS as a Contact Representative. A Contact Representative provides administrative and technical assistance to individuals and businesses who wish to ask the IRS about their tax related questions. It is a violation of IRS regulations for an IRS employee to assist other persons in filing their taxes for compensation.
During her time of employment, Gillette arranged for the deposit of multiple tax refunds into a bank account that she controlled. Among the deposits to this account was a false federal income tax return in the name of a real person, identified here as JB. JB did not file a 2009 tax return because she was in and out of jail, homeless shelters, and rehabilitation centers, and therefore did not have any income to report. The return that Gillette filed in JB’s name falsely reported $9,975 in business income as a hair stylist, falsely claimed the maximum Earned Income Tax Credit of $3,043, and falsely sought a refund of $2,975. JB never saw that return, had no knowledge of it, and did not authorized it to be filed.
Gillette also prepared and filed federal tax returns for SH for 2009 and 2010. Both of those returns featured false and inflated refund requests. From the resulting 2009 refund Gillette kept for herself $3,836. Gillette kept the entirety of the 2010 refund. Other than a preparation fee of $400, SH was not aware that Gillette kept any of the refunds claimed in her name.
Gillette also filed a 2009 federal income tax return for RH. That return featured a false and inflated refund request. Gillette kept $1,000 out of the total refund. RH was not aware that these funds had been taken by Gillette.
Gillette prepared and filed a 2009 federal income tax return for VW. That tax return also included an inflated claim for a refund. Of the total refund, $1,400 was deposited into the account controlled by Gillette. VW did not authorize Gillette or anyone else to receive any portion of her tax refund.
Gillette prepared 2010 and 2011 federal income tax returns for KD. In both cases, the returns claimed false and inflated requests for refunds. Gillette kept $3,100 from the 2010 refund in KD’s name, and $1,000 from KD’s 2011 refund. KD did not authorize Gillette or anyone else to receive any portion of her tax refund. KD understood that Gillette was to receive only a fee of $50 as payment for preparing each return.
These false and fraudulent returns are summarized below:
| Claimed Refund Amount | True Refund Owed | Amount deposited into Victim account | Amount Given to Victim | Amount Kept by Gillette | ||
1 | SH 2009 | $5,036.00 | $630.00 | $0.00 | $600.00 | $4,436.00 |
2 | SB 2010 | $1,933.00 | $533.00 | $0.00 | $0.00 | $1,933.00 |
3 | JB 2009 | $2,975.00[1] | $0.00 | $0.00 | $0.00 | $0.00 |
4 | RH 2009 | $5,216.00 | $706.00 | $4,216.00 | $0.00 | $1,000.00 |
5 | VW 2009 | $6,616.00 | $2,924.00 | $5,216.00 | $0.00 | $1,400.00 |
6 | KD 2010 | $4,402.00 | $904.00 | $1,302.00 | $0.00 | $3,100.00 |
7 | KD 2011 | $4,054.00 | $3,127.00 | $3,054.00 | $0.00 | $1,000.00 |
$12,869.00 |
1 The IRS did not release the refund.
In addition, because she was a seasonal employee there were periods when Gillette was not working for the IRS. Despite the fact that she owned and operated a child daycare business, Gillette filed for and received unemployment benefits for the following time periods:
- 9-1-09 to 2-15-11; and
- 8-13-11 to 7-7-12; and 9-1-12 to 6-15-13.
As a result of this fraud, Gillette obtained unemployment benefits totaling approximately $46,322, to which she was not entitled.
Finally, for tax year 2011, Gillette filed a federal joint income tax return, in which she failed to report: (i) approximately $5,033.00 that she stole from S.H. and K.D., individuals for whom she prepared 2010 tax returns; (iii) about $35,138.00, that she received as income from the child care business; and (iii) about $3,929.54 that her spouse received as income from the child care business.
The case was investigated by the Treasury Inspector General for Tax Administration, the Department of Labor Office of Inspector General, and the Internal Revenue Service Criminal Investigations. It was prosecuted by Assistant United States Attorney Paul G. Shapiro.