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Charges filed against trio who recruited poor and homeless to file fraudulent tax returns

Posted at 1:14 PM, Feb 15, 2018
and last updated 2018-02-15 13:14:27-05

An employee of the Cleveland Water Department, along with two others, have been charged federally for their roles in recruiting homeless and poor people to file fraudulent tax returns on their behalf, according to the U.S. District Attorney's Office.

Muhammad Hague, 40, of Avon, and Richard Warren, 37, of Philadelphia, were each indicted on one count of conspiracy to make false claims. Maryam Hague, 38, of Shaker Heights, was charged with one count of conspiracy to commit theft of public money, and one count of theft of public money.

Authorities said Maryam Hague operated Hague United Services out of her residences in Cleveland and Shaker Heights and her brother Muhammad Hague operated Hague Financial Services.

In 2011, Maryam Hague recruited her brother to recruit low-income people so they could provide their personal information to them, and she prepared and filed false tax returns on behalf of the claimant, according to court documents.

Officials said Muhammad Hague recruited former Cleveland Water employee Natasha Johnson to work for Hague Financial in 2010. They would sometimes conduct business out of the Cleveland Water Department during normal business hours.

The U.S. District Attorney said Muhammad Hague and Johnson would recruit people in lower neighborhoods, including homeless shelters, through flyers and door-to-door solicitation.

Authorities said Maryam Hague recruited Warren and his wife to recruit people in their hometown of Philadelphia. She agreed to pay a $1,000 "referral fee" for each claimant. Warren and his wife had business bank accounts for shell companies that they used to receive their referral fees.

The tax returns reported falsified occupations and amounts of incomes through unverifiable "household help" occupations such as lawn care and self-employed businesses.

In total, 786 false tax returns asking for more than $3.5 million in refunds from the IRS were filed, according to court documents.

The case is being investigated by the Internal Revenue Serice—Criminal Investigations.

The acting director, Jason Wood for the city of Cleveland, released the following statement following the indictment:

“We are aware of the indictment announced this morning against Muhammad Hague and Natasha Johnson. Mr. Hague is employed as an Assistant Water Plant Manager at Cleveland Water and Ms. Johnson is a former employee who resigned in early 2013. We are fully cooperating in this matter. As per our normal process, Mr. Hague was relieved of duty and suspended without pay pending the adjudication of the criminal charges.”