Brother-sister duo pegged for tax fraud that funded trampoline party in NC, feds say
Jamie Gandy worked for a tax preparation business in North Carolina when she suddenly started showing up to work in expensive clothing and bought a new car, her boss told federal investigators.
The 40-year-old attributed it to her younger brother’s successful pallet business — but a stack of fraudulent tax returns indicated otherwise, prosecutors said.
Now they’re both going to prison.
Jamie Gandy and her 36-year-old brother James Gandy were sentenced to federal prison on Tuesday after pleading guilty to tax fraud earlier this year, the U.S. Attorney’s Office for the Middle District of North Carolina said in a news release. Jamie Gandy was sentenced to more than three years and ordered to pay $139,254 in restitution plus an additional $62,088 in forfeiture.
Her brother was sentenced to more than four years in prison and ordered to pay $129,017 in restitution as well as $62,088 in forfeiture, according to the release.
“These defendants thought they had a clever scheme to thwart the IRS and steal from American taxpayers,” Matthew D. Line, a special agent with the Internal Revenue Service, said in the release. “IRS-Criminal Investigation will continue to vigorously pursue those who unjustly enrich themselves by preparing false claims for refunds.”
The scheme started in 2016 when Jamie Gandy — who lives in Winston-Salem — worked as a supervisor at a Liberty Tax Services franchise in nearby Lexington, court filings state.
The Liberty store offered what’s known as “rapid refund loan products from Republic Bank and Trust Company,” prosecutors said.
Rapid refund loans allowed tax filers to take out a loan on their expected refund, which the bank then used as payment, according to court filings. As part of the offering, customers were given a “NetSpend card” loaded with $1,300 of the loan proceeds to be used like a debit card.
Liberty no longer offers this service, according to its website.
After Jamie Gandy started working at the Liberty store, prosecutors said her brother started making frequent trips to “visit.” James Gandy lived more than two hours away in Dunn, where he ran a business providing shipping pallets.
Her boss, who is not named in court filings, reportedly questioned the frequent visits.
“B.A. also noticed that Jamie Gandy’s lifestyle became more affluent. He saw that she was wearing expensive clothes and had bought a new car,” court filings state. “B.A. confronted her. She claimed that her brother’s business had been very successful and that husband made an excellent salary working for James.”
It wasn’t until he looked into starting a second Liberty Tax Service store that Jamie Gandy’s boss noticed something was wrong.
Prosecutors said customers began complaining about not receiving their refunds, and corporate noticed his store “was using NetSpend cards at an unusually high rate.”
A corporate audit subsequently revealed Jamie Gandy had filed a slew of false tax returns seeking refunds and refund loans, according to court filings.
Jamie Gandy reportedly filed the returns without the tax payer’s knowledge, many of whom were James Gandy’s employees, court filings state. The pair reportedly inflated the workers’ earnings — thereby increasing the refund owed — before applying for a rapid refund loan in their name.
In early 2017, prosecutors said James Gandy brought the personal information of a resident in Dunn to Jamie Gandy, who filed a tax return on the person’s behalf and received a $5,000 refund.
She then received a NetSpend card loaded with $1,300 of the fake refund — which she gave to her brother, according to court filings.
“James Gandy used the card to purchase a deluxe trampoline party for his family in Greensboro, followed by an overnight stay at the Grandover Resort in Greensboro,” prosecutors said.
It wasn’t immediately clear in court filings what a deluxe trampoline party entails.
Court filings show the Gandy siblings were indicted in January on false claims and identity theft charges. They were subsequently arrested and released on a $20,000 bond under the supervision of a U.S. probation officer.
Jamie and James Gandy pleaded guilty in May to one count of filing a false claim against the United States, one count of making false statements to a bank and one count of aggravated identity theft, prosecutors said.
