BEAUMONT, February 11, 2016 – A 43-year-old Hankamer, Texas woman has pleaded guilty to federal income tax violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
Holly D. Kirkwood pleaded guilty to filing a false income tax return today before U.S. Magistrate Judge Keith Giblin.
According to information presented in court, beginning around January 2008 and continuing to 2011, Kirkwood was the office manager and bookkeeper for Rustbusters, a painting and sandblasting corporation, based in Humble, Texas. As part of her job responsibilities Kirkwood submitted forms to Employers One Source Group (EOSG), an employee staff leasing and payroll company, for reimbursement of expenses incurred by employees of Rustbusters. EOSG prepared and issued reimbursement checks to employees for expenses incurred by the employees of Rustbusters. In 2008, Kirkwood began submitting reimbursement forms to EOSG for the purchase of sand and grit purportedly made by her and used by the company in its operations, when in fact no such purchases had been made. This fraudulent reimbursement scheme continued through early 2011during which she received numerous reimbursement checks totaling $567,332.00 in 2008, $713,474.00 in 2009, and $671,014.00 in 2010. Because of the large increase in Rustbuster’s business during peak oil drilling years the excess reimbursements were not discovered until a forensic audit was conducted by a CPA firm. Kirkwood failed to report on her individual income tax returns for 2008 -2010 the additional unauthorized reimbursements monies received during those years instead reporting only her normal W-2 wages. Her tax returns were prepared in Orange, Texas. The additional tax due and owing for the 2008-2010 years is $209,831 in 2008, $249,766 in 2009, $219,971 in 2010, and $4,796 in 2011, totaling $684,364.
Kirkwood agreed to pay criminal restitution to the Internal Revenue Service and remains civilly liable for all penalties and interest. Under federal statutes, Kirkwood faces up to three years in federal prison. The maximum statutory sentence prescribed by Congress and is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.
This case was investigated by the Internal Revenue Service, Criminal Investigations Division and prosecuted by Assistant U.S. Attorney Robert L. Rawls.