RICO Suit Accuses Jackson Hewitt of Tax-Refund Scam

LOS ANGELES (CN) – Tax-preparation service Jackson Hewitt alters its clients’ tax returns without their knowledge to create refunds which it put in a bank account and cashed, according to a federal racketeering class action filed Monday.

Luis Lomeli sued Jackson Hewitt on Monday, claiming the second-largest tax-preparation service in the nation defrauded him of thousands of dollars by filing false returns with the Internal Revenue Service to inflate his refund – which it then stole.

Lomeli says Jackson Hewitt filed his tax returns three years in a row, and each time filed papers that were different from what he agreed to in order to artificially reduce Lomeli’s tax liability.

Instead of alerting Lomeli to the windfall amounting to more than $11,000, Lomeli says Jackson Hewitt funneled the excess money into a bank account. They drew a cashier’s check on that account, extracted additional fees from the refund, then forged his signature to cash the check and pocket the refund, according to the complaint.

“Defendants repeatedly and systematically violated that trust and used plaintiff’s identity to fraudulently obtain thousands of dollars from the Internal Revenue Service in plaintiff’s name,” Lomeli says in the complaint.

Lomeli first caught wind of the scheme when he noticed a $300 discrepancy after filing his taxes with Jackson Hewitt in 2016, the third year in a row he had used the company.

When he requested his tax files from the IRS, he noticed they were substantially different than the documents he thought he was filing with the agency. He also thought it was strange that the cashier’s check was from an account in his name registered with a bank called Civista Bank which he had never opened, according to the complaint.

Lomeli discovered the $300 discrepancy was largely due to an assortment of fees levied by Jackson Hewitt. He then ordered his 2014 and 2015 tax returns to see if there were further discrepancies, he says.

In each of those years, Jackson Hewitt had told Lomeli that his tax returns would be a wash, that he did not owe the federal government any money, but wasn’t entitled to a refund, he says.

He says he found the tax returns for 2014 and 2015 had also been altered from what the preparer had given him. In both instances, Jackson Hewitt changed the returns to artificially depress Lomeli’s tax liability so that he was entitled to a refund: instead of a wash, Lomeli actually collected about $6,200 in 2015 and about $5,700 in 2014.

Since he never received refunds, he says he checked and found the payments were disbursed to the Civista Bank account he didn’t know he had in the form of cashier’s checks, which had since been cashed.

“Plaintiff never received the cashier’s check nor was aware of its existence,” Lomeli says in the complaint. “Instead, plaintiff’s signature was forged as an endorsement on the check and the money taken without plaintiff’s knowledge.”

Lomeli says someone with Jackson Hewitt was responsible for forging the signatures and cashing the checks. He doesn’t believe his experience is unique and will seek class certification.

“There are hundreds, if not thousands, of members of each class,” his complaint states.

Lomeli seeks a declaration that Jackson Hewitt’s actions are illegal, a ban on future similar misconduct and treble damages under the Racketeer-Influenced and Corrupt Organizations Act.

Lomeli is represented by Paul Traina of Engstrom, Lipscomb & Lack Stalwart Law Group in Los Angeles.

An email sent to Jackson Hewitt seeking comment was not returned as of press time.

Follow @@MatthewCRenda

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.

Email *

Submit