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Fort Wayne man accused of tax, loan scam in Ohio

A Fort Wayne man faces an 82-count federal indictment in Toledo accusing him of running a payday loan tax scheme that cost the government more than $250,000.

Adonay “Eddie” Mehreteab, 27, appeared in U.S. District Court in Fort Wayne on Thursday after his arrest. He was released and ordered to appear in the U.S. District Court for the Northern District of Ohio early next month.

According to court documents, Mehreteab and Miranda Parr, 32, of Heath, Ohio, are both named in the indictment, which accuses them of wire fraud, conspiracy, and making false, fictitious and fraudulent claims to the IRS for the tax year 2011.

Mehreteab owned and operated two Instant Tax Service franchise offices, which he managed along with Perr.

According to Steven Dettelbach, U.S. Attorney for the Northern District of Ohio, the pair preyed upon clients who were, in some cases, desperate and in other instances not financially experienced.

Instant Tax Services offered $1,000 “holiday loans” to potential clients at the end of 2011, and those who applied with Mehreteab were told that the loans were a partial advance on their estimated 2011 tax returns.

According to the indictment, the pair and others used information provided to them by the clients to file 2011 individual tax returns on behalf of those individuals, in some cases without their knowledge.

In some instances, they filed returns containing correct information when the clients were present, but then later added false items to the returns, such as false wages, false credits or incorrect dependents, in an effort to increase the return amount. Again, this often occurred without the client’s knowledge.

His offices also charged exorbitant fees, usually between $500 and $1,000, which were deducted from the clients’ refunds without disclosing the fees prior to the filing of the taxes, according to court documents.

In total, Mehreteab and Perr netted $700,974 in refunds for the 2011 tax year, according to court documents.

In August 2012, the U.S. Attorney’s office in Toledo sought to obtain $4.3 million seized by the IRS from a bank account Mehreteab used to receive refunds from fraudulently prepared tax returns.

A civil case connected to the seizure is pending.