Crime doesn't pay? With fake W2s, duo got $400,000 for prisoners

NEWARK —Two East Orange men have admitted filing phony IRS claims for New Jersey inmates — and then using tax refunds to pay for their legal expenses.

Reginald Eaford, 46, and Winfred Moses, 48, pleaded guilty in Newark federal court charges of conspiracy to make and present false, fictitious, and fraudulent claims to the IRS.

According to an announcement from U.S. Attorney Paul J. Fishman, the two ran a scheme from 2013 through August, 2014 — including while Eaford was an inmate himself at the Essex County Correctional Facility.

They'd use social security numbers, dates of birth, and other information from inmates at the jail, then generate false W-2 forms indicating that the inmates had earned income, the announcement said. The W-2 forms would show income the inmates never earned, and money withheld from them.

The duo would then have refund checks sent to the jail, or to Moses’s East Orange residence, Fishman said — and they'd split up the proceeds with the inmates.

In all, they filed 112 phony tax returns that sought approximately $670,206 in fraudulent refunds, the U.S. attorney said. It wasn't clear from the announcement how much they actually received, but an NJ.com report from earlier this year put the amount at about $400,000.

According to the Associated Press, the inmates would then use the refund money they received to pay for bail, lawyers, and other expenses.