Couple seeking billions in bogus tax refunds bought Cadillacs, Florida home, feds say
A husband and wife engaged in a decade-long campaign to steal billions of dollars from the federal government used fake tax documents to get more than $5 million in undeserved refund checks, prosecutors said.
Now the husband has cut a deal with the government.
David O. Isagba pleaded guilty to charges of mail fraud and conspiring to defraud the United States before a federal judge in the Middle District of Florida on Tuesday, March 29, the U.S. Attorney’s Office said in a news release. He faces up to 30 years in prison.
His wife, Joyce Isagba, is slated to go to trial in May.
A defense attorney representing David Isagba did not immediately respond to McClatchy News’ request for comment on March 30.
In 2007, prosecutors said, the pair began filling out Forms 1041 and 990-T with fake information on behalf of several trusts they claimed to have. The IRS uses a Form 1041 to report income for estates and trusts, and a Form 990-T is used to report unrelated business income or claim a refund of income tax for certain investment entities.
The Isagbas were reportedly seeking high-dollar refunds for each of the trusts, which the government said did not exist.
Over the next decade, the couple submitted 227 fraudulent returns seeking $2.9 billion in refunds, according to David Isagba’s plea agreement. The government said Joyce Isagba filed three of those returns, while David Isagba filed the other 224.
Most were rejected, but the IRS accepted nine between 2009 and 2019, court documents state. At least eight were filed by David Isagba, and the refunds they received ranged from $99,000 to $1.7 million.
Prosecutors said the Isagbas ultimately received at least $5.8 million in refunds from the IRS, which they reportedly used to buy two Cadillac Escalades and a house in Leesburg, Florida, about 45 miles northwest of Orlando.
The IRS tried to contact the couple numerous times to warn that many of the claims they submitted were frivolous, the government said. They refused to accept service on most of the notices, but at least two were delivered.
A grand jury indicted them in 2019, court documents show. David Isagba was arrested in Brooklyn, New York, and Joyce Isagba voluntarily surrendered a few days later.
Both were released shortly thereafter.
David Isagba, representing himself, tried to have the case dismissed in December 2020, saying in an 18-page memorandum that prosecutors lacked both “jurisdiction over the subject matter” and “the necessary delegated authority.”
A judge denied the motion the following day.
As part of his plea agreement, David Isagba agreed to pay $2.6 million in restitution to the Department of the Treasury. He also agreed to forfeit his 2014 and 2019 Cadillac Escalades as well as $5.8 million.
A sentencing date has not been set as of March 30.
This story was originally published March 30, 2022 at 11:41 AM with the headline "Couple seeking billions in bogus tax refunds bought Cadillacs, Florida home, feds say."
