Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, June 24, 1995 TAG: 9506260148
SECTION: VIRGINIA PAGE: C-1 EDITION: METRO
SOURCE: JAN VERTEFEUILLE STAFF WRITER
DATELINE: LENGTH: Medium
Ernest "Wes" Garraghty got nothing for his participation in a scam against the IRS except prison sentences for his mother, his sister and himself.
The Garraghty family and nine others were sentenced in Roanoke federal court Thursday and Friday for their part in a scheme, run out of Bland Correctional Center, to file false tax returns and collect large refunds.
The operation was the brainchild of Jimmy Blankenship, an inmate with a long history of low-level white-collar crime.
With blank W-2 forms and old employers' identification numbers, Blankenship concocted fictitious wage histories for himself and filed false tax returns. After he began serving time at Bland for embezzlement, he expanded his operation and started pulling in fellow prisoners, taking a cut of their refunds.
False 1040EZ income tax returns were filed requesting refunds of up to $4,233. Almost $28,000 was paid out before the Internal Revenue Service caught on.
Blankenship also recruited fellow inmate Garraghty's sister, Tammy Moran, and mother, Shirley Garraghty, to pick up packages he mailed to a post office box. The packages were filled with tax returns, and the women were supposed to remail them so the envelopes wouldn't have the prison address stamped on them.
Moran, 30, also filed a fake tax return, claiming that she worked for a business Blankenship operated. She pleaded guilty to filing the false return but testified that she thought she was working for a legitimate business at the time, remailing tax refunds for the inmate.
"Well, what kind of job is mailing mail for a prisoner?'' U.S. District Judge Samuel Wilson asked her.
A pretty good one, Moran said, since she received $600, $1,000 and sometimes more in cash and money orders from Blankenship to feed her daily cocaine habit at the time. She has worked only a few months in her life and knew little about W-2 forms and tax returns, her attorney, Gary Bowman, argued.
He argued her case so persistently, in fact, that Wilson lost patience after repeatedly telling Bowman to stop arguing points and move on.
"If I have to tell you again," Wilson said, "I'm going to have to have the marshal escort you out of here."
Moran was sentenced to 33 months in jail, and her mother to six months. Wes Garraghty got an additional 18 months in prison.
Blankenship apologized to the court and said he accepted full responsibility for his co-defendants' troubles. The 37-year-old Pulaski County man had cooperated with authorities immediately and pleaded guilty.
"More than myself, I regret more for ... my co-conspirators, because if it weren't for me, they wouldn't be involved in any of it," Blankenship said Friday, telling Wilson he didn't deserve to ask for leniency. "I have a problem with being someone I'm not."
Wilson sentenced him to 51 months in prison and told him he was responsible, along with his co-defendants, for making restitution of $27,860. Blankenship is currently serving a 28-year sentence for embezzlement.
When the IRS became suspicious, it stopped mailing back the refunds and began a quiet investigation, including staking out the Goodview Post Office, where Moran and her mother picked up Blankenship's packages.
A friend of the Garraghtys', Arletta Greenway, was sentenced to three years' probation for also filing a false tax return. Her cooperation with the government helped indict Moran and Shirley Garraghty, and Assistant U.S. Attorney Ken Sorenson did not ask that she get jail time.
Other current and former Bland inmates sentenced Friday were Keith Furr, Albert M. Deal, Tony M. Branham, Robert J. O'Toole, James A. Shifflett, Brian S. Martin and Irvin Guy. They received sentences ranging from a month of home confinement to nine months in jail.
Those who received fraudulent refunds also must make restitution to the IRS.
The one inmate who chose to go to trial and not plead guilty, David Breen, was found not guilty by a jury in April. One defendant remains a fugitive.
by CNB