Inmate pleads guilty to tax scam

Thursday, January 3, 2013

PANAMA CITY — An unorthodox crime has resulted in an unorthodox conviction in the case of the prison inmate accused of running a tax fraud scheme from behind bars.

The 14thJudicial Circuit State Attorney’s Office was set to take Michael William Joseph III to trial in Jackson County, but a judge ruled against State Attorney Glenn Hess and prohibited witnesses for the state from testifying about certain documents that he determined were confidential. Judge William Wright’s decision was eventually overturned by the 1stDistrict Court of Appeals, but not before Joseph was indicted by a federal grand jury.

On Thursday, Joseph pleaded guilty in U.S. District Court to 41 of 46 counts ranging from theft of government money to mail fraud to filing false tax returns. One of those counts — conspiracy to commit mail fraud — carries a 20-year prison sentence. Judge Richard Smoak scheduled a sentencing hearing for March 20.

Joseph was an inmate at Apalachee Correctional Institution in Sneads from 2006 through 2008, the years he filed false returns using identities of other inmates. He submitted at least $179,000 in false claims, of which the government paid $51,298. Investigators recovered more than $17,000 from Joseph’s bank account and another $11,600 buried the backyard of his mother’s Tampa home.

Smoak didn’t address the government’s forfeiture claim seeking the return of that money during Thursday’s hearing.

In a statement issued after the hearing, Hess said he was pleased with U.S. Attorney’s Office’s handling of the case. Hess said he would wait until Joseph has been sentenced before he decides whether or not to pursue the pending state charges.