Former IRS worker convicted of tax scam

A former IRS worker faces more than 15 years in prison after a jury convicted her of masterminding a scheme to collect thousands of dollars in refunds by filing bogus claims.

Jurors took less than a day to find Patricia Fountain, 35, of Philadelphia, guilty of extortion, conspiracy and tax fraud. They also convicted her boyfriend, Larry Ishmael, 40, and a friend, Calvin Johnson Jr.

The weeklong trial before U.S. District Judge Stewart Dalzell showcased how a longtime IRS insider exploited the agency's vulnerabilities and ripped it off for nearly five years.

In 2006, Fountain, a customer-service representative, discovered that the IRS did not have the time or resources to verify telephone tax-credit requests from filers seeking less than $1,500. She also later learned that the agency was not requiring proof from filers seeking first-time homebuyer credits worth as much as $8,000.

"The defendants knew it. They knew the money was coming in easy," Assistant U.S. Attorney Tiwana L. Wright told jurors.

Fountain turned to her boyfriend; her hairdresser, Natasha Witherspoon; and a friend, Howard Chilsom, to recruit straw filers, prosecutors said. They enlisted drug addicts, welfare recipients, and ex-cons -- people willing to quietly hand over a chunk of the refunds, from $400 to $3,000.

When Fountain didn't get a cut quickly enough, she filed forms to rescind the refund request, and straw filers got IRS letters demanding the cash back.

-- from wire reports