SAN FRANCISCO – Duffy R. Dashner (a/k/a Kevin Dashner) was sentenced to 57 months’ imprisonment for conspiring to submit false claims and ordered to pay restitution of $1,769,418 to the Internal Revenue Service announced Acting United States Attorney Brian J. Stretch, Acting Assistant Attorney General for the Tax Division Caroline D. Ciraolo, and Internal Revenue Service, Criminal Investigation, Acting Special Agent in Charge Thomas P. McMahon.
According to court documents, Dashner, 42, of Reseda, Calif., and his co-conspirators, including Mark R. Maness, operated a business called O.I.D. Process through which they helped others prepare and file individual federal income tax returns. In the returns, the filers claimed false Original Issue Discount (OID) interest income and federal tax withholdings resulting in fraudulent claims for tax refunds (OID returns). Dashner and Maness charged clients of O.I.D. Process a non-refundable registration fee to join the organization and a 20 percent “refund acquisition fee” for any refund check issued by the Internal Revenue Service (IRS). Dashner and Maness also operated a website and conducted weekly conference calls with clients to promote their business and to assist clients in preparing and filing OID returns.
Dashner and Maness required clients of O.I.D. Process to change their mailing address with the IRS to the address of another co-conspirator who was an attorney in San Francisco. As a result, all correspondence from the IRS to the clients and the clients’ refund checks were sent to the attorney’s address rather than to the clients’ home address. In this way, Dashner and Maness ensured they would receive a 20 percent refund acquisition fee. O.I.D. Process clients filed approximately 200 OID returns claiming refunds that totaled approximately $228 million.
Dashner was charged by indictment with one count of conspiracy to submit false claims, in violation of 18 U.S.C. § 286, and two counts of aiding and assisting in the presentation of a false income tax return, in violation of 26 U.S.C. § 7206(2). On June 18, 2015, Dashner pleaded guilty to one count of conspiracy to submit false claims, in violation of 18 U.S.C § 286.
Dashner’s sentencing hearing took place before the Honorable Susan Illston, United States District Judge, in San Francisco. In addition to the prison term, Dashner was ordered to pay $1.7 million in restitution to the IRS. Dashner will begin serving his prison term immediately.
Maness previously pleaded guilty to conspiracy to submit false claims against the United States and was sentenced in February 2015 to serve 41 months in prison, and ordered to pay $1,176,668 in restitution to the IRS.
United States Department of Justice Tax Division Trial Attorney Matthew J. Kluge and Assistant United States Attorney Michael G. Pitman are prosecuting the case. The prosecution is the result of an investigation by IRS-CI.