MEMPHIS, Tenn. — Federal prosecutors are seeking to shut down a Memphis-based company on claims it prepared false tax returns in at least three states.
The Department of Justice said it is suing Mo Money Taxes and requesting an injunction to stop it from serving as a federal tax preparer.
Mo Money Taxes was criticized last year by customers who alleged the company failed to return tax refunds in a reasonable amount of time. Congressmen Bobby Scott of Virginia and Steve Cohen asked the Justice Department to investigate the company in March 2012.
A complaint filed in the Western District of Tennessee accuses the company, owned by Markey Granberry and Derrick Robinson, of filing false returns that incorrectly reported their customers’ tax liabilities, which caused clients to underpay their taxes and helped the company hike its profits.
Returns filed by tax preparers made false claims for filing status, education credits and the Earned Income Tax Credit in Virginia, Mississippi and Tennessee, according to the lawsuit.
“New preparers are trained to prepare false and fraudulent tax returns for the purpose of significantly and illegally enlarging the Defendants’ profits, and resulting in losses to the U.S. Treasury,” the lawsuit said.
The lawsuit also says the company made fake W-2 forms, sold false loan products and charged deceptively high fees.
The phone number listed on the company’s website was disconnected and an email to the company was returned as undeliverable Wednesday.
Founded in 1995, Mo Money Taxes chain operated as many as 300 tax return preparation offices in 18 states at its peak. The estimated loss from tax returns prepared in 2011 at offices in Atlanta, Memphis, Richmond, Va. and Jackson, Miss. is more than $9 million, according to the lawsuit.