Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, January 25, 1995 TAG: 9501250062
SECTION: VIRGINIA PAGE: C1 EDITION: METRO
SOURCE: MICHAEL STOWE STAFF WRITER
DATELINE: LENGTH: Medium
Assistant U.S. Attorney Ken Sorenson said the Internal Revenue Service paid $27,860 in tax refunds before the government discovered the inmates' scheme.
While it's not uncommon to charge people with filing bogus tax returns, Sorenson said the U.S. attorney's office in Roanoke never has prosecuted a tax case involving prisoners.
``This is the first of its kind,'' he said. ``This was very widespread.''
The 28-count indictment charges 11 inmates and three women not in prison with conspiring to defraud the IRS.
Sorenson said James C. Blankenship, a 37-year-old inmate from Pulaski County, was the leader of the conspiracy.
``Without a doubt, he was the mastermind behind the scheme,'' the prosecutor said. ``He's a pretty intelligent guy.''
Sorenson said the government has evidence that Blankenship got the idea for the conspiracy when two inmates taking a tax course at Wytheville Community College asked him for help with their homework.
Ernest ``Wes'' Garraghty Jr., one of the inmates taking the tax course, got involved and recruited his mother and sister - who are not incarcerated - to assist in the scheme, Sorenson said.
The indictment charges that Garraghty's sister, 29-year-old Tammy Moran of Vinton, and his mother, 48-year-old Shirley M. Garraghty of Ferrum, operated a mail drop for the returns and refunds.
The indictment alleges that in early 1993, Moran and several inmates supplied Blankenship with many IRS W-2 forms. Using identification numbers of former employers and social security numbers and names of other inmates, Blankenship began filing the false tax returns, the indictment claims.
Moran's roommate, Tina Latempa, rented a post-office box in the Bedford County community of Goodview on March 23, 1993, the indictment says. Although Latempa was not charged, Sorenson said the post-office box was used as a mail drop for the bogus tax returns.
The inmates would mail the returns to the post-office box, where Moran and Shirley Garraghty picked them up and sent them to the IRS in Philadelphia.
Sorenson said the government ``stumbled upon'' the scheme when numerous tax refunds were mailed to the Goodview post-office box.
A total of 35 false returns were filed, Sorenson said, but the government is not certain that all inmates named on the returns knew about the scheme. Nearly all of the returns listed income of $27,317 and requested refunds of $2,915, according to the indictment.
In addition to Blankenship and Ernest Garraghty, inmates charged in the indictment include: Brian S. Martin, 29; James A. Shifflett, 24; Robert J. O'Toole, 57; David F. Breen, 32; Tony M. Branham, 34; Allen T. Elder, 31; Irving D. Guy, 39; Keith W. Furr, 34; and Albert M. Deal, 33.
Sorenson said some of the men charged have been transferred or paroled from the Bland Correctional Center.
Arletta Greenway, a 39-year-old Moneta woman who is not incarcerated, was charged with aiding in the scheme by filing a false electronic tax return.
by CNB