A married couple from Hays Springs, near Chadron wanted a big income tax rebate, but got a prison sentence instead.
Chief United States District Court Judge Laurie Smith Camp has sentenced David L. Kleensang, 61, and Bernita M. Kleensang, 59, both of Hays Springs, to six years in federal prison.
Evidence presented at trial showed that the Kleensangs had not filed any tax returns in 2003-06 or in 2008-11, U.S. Attorney Deb Gilg said.
The Kleensangs testified under oath in state court proceedings in Sheridan County that they did not have to file tax returns because they were not federal employees and did not live in the District of Columbia.
However, in 2008, together they filed a total of 67 returns for 2007, with David Kleensang filing 57 separate returns for himself and Bernita Kleensang filing 10 separate returns on her behalf.
Many of these returns sought refunds of $2.5 million -$5 million. Other returns sought refunds for the amounts involved in two separate lawsuits that were filed against the Kleensangs in Sheridan County District Court, Gilg said.
During the investigation, Gilg said the Kleensangs admitted that they filed the bogus returns to “get justice” for judgments that were rendered against them in Sheridan County. The total amount of the refunds they claimed was $48.4 million.
The frivolous returns were detected by the Frivolous Return Program Unit, established by the Internal Revenue Service around 2001, Gilg said. Frivolous returns are pulled and the filer is sent a warning letter that says if the returns are not corrected, the filer could be assessed a $5,000 penalty.
Not only did the Kleensangs not correct their initial returns, they continued to file similar returns for nearly four months, seeking refunds, Gilg said.
David Kleensang was convicted of one count of conspiracy to defraud the United States, one count of endeavoring to obstruct the due administration of the Internal Revenue laws, and 13 counts of presenting false claims to the United States.
Bernita Kleensang was convicted of one count of conspiracy to defraud the United States and six counts of presenting false claims to the United States.
The Kleensangs were further ordered to serve three years of supervised release following their release from prison.