A former Mancos resident has pleaded guilty to filing a false claim with the Internal Revenue Service and receiving almost $379,000 in an unwarranted refund.
Teresa A. Dietzenbach, 51, entered her plea on March 13 after being indicted on five counts of filing false claims by a grand jury in June 2013.
“She tried to get up to $1 million,” said Jeffrey Dorschner, the spokesman for the U.S. Attorney’s Office for the District of Colorado, “and the IRS sent her about $379,000. She cashed the check. Then they realized what she was doing and cut her off.”
Dietzenbach filed claims for the years 2005 through 2008, requesting refunds for interest income she said had been 100 percent withheld. The income was on debt instruments, such as U.S. savings bonds, where the purchase price is less than the redemption value. The interest is called original issue discount income.
She gave her tax-preparer information about her credit cards and debts, which the preparer used to create false 1099 documents supposedly from various financial institutions.
The false 1099s reflected the purported interest income and claimed 100 percent of the income was withheld. Valid 1099s are generally issued by the financial institutions that pay the interest and withhold federal-income taxes.
The almost $379,000 paid to Dietzenbach was from the first false tax return she filed.
“The government will seek the entire $379,000 back on behalf of taxpayers,” Dorschner said. “Her exposure also includes possible incarceration of up to five years and a fine.”
The fine for filing a false claim can be up to $250,000. The plea agreement as filed last week requests a fine in the $5,000 to $50,000 range and supervised release for not more than one year if the state of Arizona agrees to take on the supervision. Dietzenbach now lives in Phoenix.
“It happens occasionally that the judge defers acceptance of a plea-agreement document until he asks the probation office to do a presentencing report to see if it mirrors the criminal investigation,” Dorschner said. “In any case, the guilty plea stands.”
The case was investigated by IRS Criminal Investigation Special Agent in Charge Stephen Boyd and his office.
“They did all the hard work on this case,” Dorschner said about Boyd’s office. “They are amazing on crimes that involve financial wrongdoing, like money laundering.”
U.S. District Court Judge Philip A. Brimmer will sentence Dietzenbach on June 16.