- The Washington Times - Wednesday, April 23, 2003

A Richmond father and daughter have been indicted by a federal grand jury on charges of conspiring to defraud the government and filing a false tax return that claimed a $500,000 refund for slavery reparations, the Internal Revenue Service said yesterday.

IRS spokeswoman Beverly Harris said Robert Lee Foster, 51, and his daughter, Crystal Demetria Foster, 25, of Quinton, Va., were named in indictments handed up in federal court in Richmond.

Earlier this year, the Justice Department obtained injunctions against Mr. Foster, a tax preparer, and five other preparers reportedly linked to the reparations scam. The others included Willie Haugabook of Montezuma, Ga.; Eddie and Erma Mims of Sylvania, Ga.; Andrew L. Wiley, of Durant, Miss.; and Morris James Sr., of Montezuma, Ga.

The IRS has included slavery reparations on its list of the "Dirty Dozen" tax scams the agency has urged taxpayers to avoid. Efforts by the IRS and the Justice Department to shut down tax scams based on slavery reparations and similar claims have resulted in a 97 percent drop in the claims in recent years.

According to the Richmond indictment, released Monday, Mr. Foster and his daughter received a tax refund of $507,490.91 from the IRS on Oct. 29, 2001 the largest refund paid by the government that year. The claim was based on Miss Foster's contention that she and other blacks suffered harm because of slavery and its aftermath.

Mr. Foster was charged with four counts and his daughter with one count of making fraudulent claims against the government. Both were accused of conspiracy to defraud the government. Court appearances are pending. A trial is expected to begin in June.

Susan M. Dukes, who heads the IRS' criminal investigations division, said the Foster case involved bogus claims made on multiple individual income-tax returns ranging from $8,000 to the $507,490.91 paid to Miss Foster. They were among nearly 80,000 tax returns in 2001 that claimed such refunds.

Miss Foster, who reported income of $3,429 in 2000, was accused of claiming on her tax return that she had overpaid her taxes by $500,000 on capital gains. Her father had prepared her return and, according to court records, sought a similar $500,000 refund on his own return.

The IRS approved Miss Foster's refund, and she received her refund check after answering a letter from the agency on the identity of her investment firm. According to the records, she said it was the "U.S. Department of Treasury, Black Capital Investments."

IRS officials said although no such firm exists, the refund check was issued anyway. Later, when the agency realized its mistake, the IRS filed a civil lawsuit in November 2001 to get the money back from the Fosters and others to whom money had been paid.

U.S. District Judge Richard L. Williams found in favor of the IRS and ordered the funds returned. The Fosters appealed, but the 4th U.S. Circuit Court of Appeals affirmed the judge's order. About $266,000 had been returned by late 2001.

If convicted, Mr. Foster faces up to 30 years in prison, while his daughter could receive 15 years.

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