A former inmate of the California Correctional Center in Susanville, described as the ringleader of a prison tax fraud scheme, has pleaded guilty to conspiring to defraud the U.S. government and filing false claims for federal tax returns.
Edwin Ludwig IV, 34, currently an inmate in an Oklahoma state prison, entered the guilty plea Wednesday in federal court in Sacramento, according to a U.S. attorney’s office news release.
Ludwig was at the Susanville facility in March 2011 when he and three other inmates began obtaining personal identification information of other inmates in the correctional center, according to court documents.
Ludwig then provided the information to co-defendants on the outside, who prepared and filed false tax returns with the Internal Revenue Service, claiming refunds to which the inmates were not entitled. False tax returns also were filed in some of the defendants’ own names. The defendants had the false refund checks deposited to various bank accounts they controlled, authorities said.
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According to the indictment, the investigation into the conspiracy began Jan. 11, 2012, when a correctional officer found some records behind Ludwig’s personal locker.
Court documents indicate that the refunds were used for personal expenditures and included the purchase of prepaid debit cards and adding money to inmates’ commissary accounts. In all, authorities said, the conspiracy resulted in at least 247 false claims for income tax returns in tax years 2008 through 2011. Although the IRS stopped some of the refunds, about 138 fraudulent refunds totaling some $219,984 were issued.
Ludwig is to be sentenced July 8 by U.S. District Judge Kimberly J. Mueller.
The case resulted from an investigation by the IRS, the FBI and the Investigative Service Unit at the California Correctional Center.
Call The Bee’s Cathy Locke, (916) 321-5287.