A Michigan man pleaded guilty yesterday to filing a false claim in connection with his $7 million scheme to defraud the IRS.
“Filing false returns isn’t a shortcut — it’s pure theft,” said Assistant Attorney General Colin M. McDonald of the Justice Department’s National Fraud Enforcement Division. “Fraudulent refunds steal millions from Americans who play by the rules, and we will pursue those who willfully cheat the tax system without fear or favor.”
According to court documents and statements made in court, Rodney Underwood, of Detroit, prepared and filed with the IRS more than 200 nearly identically false tax returns on behalf of clients from various locations in Detroit. Underwood “ghost prepared” these returns, meaning he left the paid preparer section blank so the returns appeared to be self-prepared. On each of the false tax returns, Underwood reported false dividend income amounts and false withholding amounts to generate refunds that the clients were not entitled to receive. Underwood did not report fees he received from the scheme as income on his own individual tax returns. The false tax returns filed by Underwood fraudulently claimed more than $7 million in refunds and caused an actual loss to the government of approximately $6.2 million.
Underwood pleaded guilty to making a false claim. He is scheduled to be sentenced on Jan. 6, 2027 and faces a maximum penalty of five years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
IRS Criminal Investigation is investigating the case.
Trial Attorneys Shawn Noud and Alexis Hughes of the National Fraud Enforcement Division’s Tax Section are prosecuting the case.
