MONTGOMERY, AL (WSFA) - The owner of a Montgomery tax preparation service doing business as Rocket Refund learned his fate for tax fraud convictions during a sentencing hearing Wednesday.
Michael T. Chappell, 53, will serve four and a half year in prison for filing false and fraudulent federal income tax returns. He'll also have to pay $7,000 in restitution to the United States.
District Judge W. Keith Watkins handed down the sentence.
Chappell managed Rocket Refund at locations on Lower Wetumpka Road and Airbase Boulevard in Montgomery.
Chappell entered a guilty plea on April 20, 2011.
In the plea, Chappell admitted that he and his employees prepared thousands of false federal income tax returns so they could benefit from maximized refunds to customers. The falsifications were achieved by manipulating figures that resulted in the maximum amount available in the Earned Income Credit amounts.
Prosecutors say Rocket Refund used the fraudulent practice from 2005 to 2008, and the business was bold enough to apply for individual refunds for clients who were not even employed. The ill-gotten returns netted $2,600 to $4,800 per filing.
While Chappell will only be required to pay the government $7,000, Judge Watkins determined the government's loss at well over $7 million. It wasn't known what happened to the other $6.99 million.
"I'm pleased with the outcome..." IRS Special Agent In Charge Reginael D. McDaniel said.