GREENEVILLE - Two Hawkins County residents have been indicted by a federal grand jury in connection to a scheme to obtain false refunds from the Internal Revenue Service.
Scott Eugene Watson, 44, of Mount Carmel, and Amy Renee Greene, 39, of Morristown, made an initial appearance in U.S. District Court in Greeneville last month.
The two have been charged with one count of conspiracy to defraud the United States and 18 counts of filing false claims with the government.
Watson and Greene entered not guilty pleas and each was released on a $20,000 unsecured bond.
Watson and Greene are scheduled for trial on June 20.
Each faces a maximum penalty of 100 years in prison and a fine of up to $4.75 million if convicted on all counts.
According to the indictment, from January 2002 until Jan. 31, 2005, Watson and his former spouse, Greene, conspired to defraud the United States by participating in a scheme to obtain and help others file to obtain false refunds from the IRS.
The alleged false returns pertained to 2001, 2002 and 2003 tax years and were filed in their own names and in the names of others, claiming refunds which they knew they and the others were not entitled to receive.
The indictment charges that Watson and Greene recruited individuals to file the false income tax returns.
Watson and Greene also allegedly created false W-2 forms using a defunct business, Pyramid Distribution of Morristown, as the employer.
The forms contained fabricated amounts of income and tax withholdings, knowing these forms would be used to file income tax returns with the IRS, thus generating fraudulent tax refunds, the indictment charges.
The indictment states that Watson and Greene accompanied some of the recruited individuals to commercial return preparers to have the false returns prepared and filed with the IRS.
They then also accompanied some of them back to the preparer's office to pick up the refund anticipation loan (RAL) check applied for by the individuals through the tax return preparers.
Watson and Green then allegedly helped those individuals cash the checks and then took and kept all or part of the RAL check proceeds from the recruited individuals.
According to the indictment, Watson and Greene's scheme falsely claimed approximately $91,355 in fraudulent refunds from the U.S. government.