IRS Sends Inmate $359,000 Instead Of $2 Million Bill
ATLANTA (AP) _ A federal grand jury has indicted a federal prison inmate who was mistakenly sent $359,380.25 by the Internal Revenue Service and failed to return the money.
The IRS was attempting to collect $2 million in back taxes in 1985 from Joseph H. Hale, who was serving an unrelated five-year prison term for fraud. But the IRS made a computer error and a check was mailed for $359,380.25.
The indictment, returned Wednesday by a federal grand jury in Atlanta, charged Hale, 45, and a friend, Ann W. McRee, 43, of Atlanta, with seven counts of fraud. The indictment alleges that Ms. McRee helped Hale dispose of the money. They face maximum jail terms of 65 years.
After two years of searching, the IRS said it found $55,558.34 of its money and wants the other $303,821.91 back.
″It was a mistake,″ said Les Witmer, IRS spokesman for the Southeast. ″It was a computer mistake. Apparently a claim for refund was filed and apparently it was honored. A refund somehow went out.″
Hale, who owned a precious metals company, was charged in 1981 by the Securities and Exchange Commission with violating securities laws by depleting the company of more than $1.65 million and filing false reports on the status of the firm.
In March 1983, a federal judge in a civil suit ruled that Hale had committed fraud and ordered him to pay back any illegally obtained funds.
He was indicted in August 1984 on charges of defrauding shareholders, falsifying minutes, filing false and misleading reports, and perjury. He was convicted in December of that year, sentenced to five years in prison and fined $235,000.
Hale was in Maxwell Federal Prison Camp in Montgomery, Ala., when the IRS began efforts to collect the $2 million in personal taxes, unrelated to the criminal charges. He is now in a federal prison in Tallahassee, Fla.