Crime & Courts

Alaska federal inmate gets 9 more years for tax fraud scheme

An Alaska federal prison inmate serving a 15-year sentence has had nearly a decade of additional time behind bars added for filing false tax returns.

Forty-nine-year-old John Richard Koesterman was sentenced Friday to nine years in prison for conspiracy to defraud the U.S. government by means of mail fraud and identity theft. The inmate's new term will begin after he's served his previous sentence of 15 years for a drug conspiracy conviction, according to a press release from the state's U.S. Attorney's office.

Koesterman pleaded guilty to three of 18 counts as part of a plea deal in September and was ordered to forfeit $19,538.75 that was seized by the government, as well as pay $95,568 of restitution, about $500 less than he and his co-conspirators bilked out of their victims, many of whom are prison inmates themselves.

According to a federal plea agreement affidavit, the scheme occurred over a nearly two-year period, July 20, 2009 to May 2, 2011, with at least five other individuals. The group obtained names and Social Security numbers "in some instances … without the knowledge or permission" of their victims.

Koesterman and the others jotted down fake wages on tax returns that claimed they were entitled to thousands of dollars in refunds -- claims that would garner between $3,000 and $7,000. The tax returns were mailed from Alaska and Colorado to Internal Revenue Service offices in states across the Lower 48, according to the affidavit.

When the checks arrived in the mail at the addresses of Koesterman's co-conspirators outside of jail, they'd cash or deposit the illegal kickbacks, sometimes forging the victims' signatures in order get the money. Koesterman's helpers received a portion of the earnings while his cut was sent to people who agreed to hold the money for him, according to the affidavit.

He communicated with his fellow criminals through prison phone calls, during which he'd track the status of the tax returns. Over the course of the scheme, the group prepared and submitted 55 fake tax returns using the information of 28 people; the documents claimed refunds totaling about $275,000, the press release says.

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Federal District Court Judge Timothy M. Burgess said during Koesterman's sentencing that "taxpayers have to foot the bill for making good on the loss."

The sentence "signals that IRS Criminal Investigations will bring to justice those who abuse the tax system and attempt to swindle the honest tax paying public," said Teri Alexander, special agent in charge of Internal Revenue Service criminal investigations in the Pacific Northwest, in a prepared statement.

Contact Jerzy Shedlock at jerzy(at)alaskadispatch.com. Follow him on Twitter @jerzyms.

Jerzy Shedlock

Jerzy Shedlock is a former reporter for Alaska Dispatch News. He left the ADN in 2017.

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