Alleged mastermind of K.C. tax scheme to change plea

KANSAS CITY, Mo. -- A Kansas City man accused of masterminding a nationwide tax fraud scheme that attempted to bring in nearly $96 million in unearned tax refunds is scheduled to change his plea in federal court.

A change-of-plea hearing has been scheduled for Nov. 7 for Gerald A. Poynter, 48, who is facing 66 charges in a 72-count indictment that also names 13 other co-defendants. All were charged with conspiracy to defraud the U.S. government, and all but one were accused of filing false claims for tax refunds.

Poynter previously pleaded not guilty to all charges.

Eight other co-conspirators have entered into plea bargains with prosecutors, leaving only five defendants to stand trial if Poynter changes his plea.

Three of those who pleaded guilty -- Kristi Jones, 40, of Riverside; Shirley Oyer, 72, of Overland Park, Kan.; and Jennifer Wilson, 36, of Cumming, Ga. -- have received sentences ranging from time served to a year and a day in prison, while the others are awaiting sentencing.

Electronic court documents show no indication of a plea bargain for Poynter, also known as Brother Jerry Love, who could face a maximum of 10 years in prison on the conspiracy charge and five years for each of the 65 false claims charges.

Don Ledford, spokesman for the U.S. attorney's office in Kansas City, said he couldn't confirm the lack of a plea deal. Poynter's attorney, Willie Epps Jr., also declined to discuss the issue.

"Mr. Poynter looks forward to resolving the charges pending against him," Epps said Thursday.

Prosecutors said the scheme involved the use of 1099-Original Issue Discount forms, which typically are used by tax filers who must pay taxes on income they receive from bond investments. They say Poynter, his branch managers and office staff prepared and filed at least 284 tax returns, then got a portion of whatever money was refunded, prosecutors said.

According to the indictment, participants had clients provide financial documents, such as mortgage and loan statements, bank statements, credit card statements and other records of debt and spending. They then listed those debts on tax returns as investment earnings.

The tax preparers are accused of inflating the amount of taxes on individual returns they claimed the government withheld, then filing for refunds -- some in excess of $1 million -- when none of the clients had earned, or paid taxes on, any bond income.

The scheme operated from July 2008 through September 2011, prosecutors said, and was pitched in presentations at hotels and private homes, in addition to telephone conference calls. The group attracted at least 145 clients across the U.S. and resulted in the filing at least 284 fraudulent returns on their behalf totaling $95.9 million, prosecutors said.

The Internal Revenue Service rejected 89 percent of the fraudulent claims, prosecutors said, but that means 11 percent made it through the system and resulting in illegal refunds of more than $3.5 million.

Poynter instructed his co-conspirators to refer to his fees as "Love Donations" and to write checks for his fees to "Jerry Love Ministries," prosecutors said.