A city of Cleveland Water Department employee was one of three people charged in federal court Wednesday as part of a scam that involved recruiting people from low-income areas and homeless shelters to use their personal information to file fraudulent tax returns. Muhammad Hague, 40, of Avon was indicted on one count of conspiracy to make false claims.

Hague is an assistant water plant manager at the Crown Water Treatment Plant in Westlake, a city of Cleveland spokesman said. He was suspended without pay following his indictment, according to a statement from Cleveland Water Acting Director Jason Wood.

His sister, 38-year-old Maryam Hague, was also charged via criminal information with conspiracy and theft of public money. A criminal information usually indicates a plea agreement is in the works.

Federal prosecutors say the Hagues and others conspired to seek out people in low-income areas and obtain information like Social Security numbers to use on false income tax returns filed with IRS.

The U.S. Attorney’s Office says Maryam Hague and her co-conspirators filed 786 false tax returns seeking more than $3.5 million in fraudulent refunds. The federal government wants to seize Maryam Hague’s Shaker Heights home.

Muhammad Hague performed some work for the tax scam on city time, the government says.

In addition to the Hagues, federal prosecutors say at least three others were involved. Also charged Wednesday was Richard Warren of Philadelphia. Prosecutors say he worked with his wife Sabrina Sorrell to recruit people to participate in a related scam run by Maryam Hague.

Sorrell and Natasha Johnson, another Cleveland Water Department employee, pleaded guilty last year to conspiracy to make false claims, according to court filings.

Agents have investigated the case for several years and believe the scam took place between 2010 and 2013.

Wood’s statement said Johnson resigned form the city in early 2013 and that the city is fully cooperating with investigators.

Court filings say Maryam Hague started having her brother get people’s personal information — which included addresses, dates of birth, Social Security numbers and bank account information — around January 2011. Soon thereafter, she taught her brother how to prepare and file false income tax returns.

Muhammad Hague, Johnson and others prepared tax returns as Hague Financial Services. He also taught Johnson how to file false income tax returns, authorities claim.

Both sometimes conducted Hague Financial business while also working at the Cleveland Water Department, officials say.

They took portions of the falsified tax refunds for themselves. Beginning in the 2012 tax filing season, they directed the entire refund to the people whose information they used and typically charged a “fee” of $1,500, according to authorities.

All of this happened around the same time Maryam Hague advertised herself as a tax preparer through her company Hague United Services. She filed tax returns claiming false tax refunds on behalf of people in Cleveland and Philadelphia, and had Sorrell and Warren recruit people in their area, according to charging documents.

Maryam Hague paid the couple a $1,000 referral fee for each person they recruited. Like Muhammad Hague and Johnson, they typically recruited people in Philadelphia’s low-income areas, prosecutors say. Some of the refund money went into bank accounts controlled by Hague, Sorrell and Warren.

Source: http://www.cleveland.com/court-justice/index.ssf/2018/02/cleveland_water_department_emp.html

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