Final four sentenced in tax fraud case

The last of four Knox County residents who admitted to their respective parts in a conspiracy to file false federal tax returns, collecting more than $125,000 in refunds, were sentenced in London last week.

According to paperwork filed in U.S. District Court, Billy Ray Hamilton was sentenced to three years in prison and Brian Hamilton was sentenced to six years, 10 months prison at their respective sentencing hearings in front of Judge Amul Thapar.

Billy Ray and Brian Hamilton along with Diana Hill and Patsy Carnes were indicted in October on the conspiracy charge.

In addition, Billy Ray and Brian Hamilton were each charged with 30 counts of participating in a scheme to defraud the United States to obtain money by mean of materially false and fraudulent pretenses, or misrepresentations, and 10 counts of using the names, Social Security numbers and other personal identifying information of 10 different individuals in relation to the wire fraud.

Billy Ray and Brian Hamilton admitted in their respective plea agreements to preparing and submitting the false tax returns and arranging for the refunds to be disbursed into bank accounts opened by Carnes, to prepaid money cards, or through checks mailed to various addresses throughout eastern Kentucky.

The Hamiltons admitted that Carnes and Hill both provided the personal identifying information they collected from driver’s licenses and Social Security cards presented by customers at the Bailey Switch Pawn Shop between January 2011 and July 2012.

Thapar ordered Brian Hamilton to pay restitution to the IRS in the amount of $221,729.74 and Billy Ray Hamilton to pay restitution to the IRS in the amount of $272,808.98.

Carnes, who pleaded guilty to one count of conspiracy to defraud the government, was sentenced in July to 22 months in prison and ordered to pay $226,652.89 in restitution.

Hill also pleaded guilty to one count of conspiracy to defraud the government. She was sentenced to 16 months in prison and ordered to pay $226,652.89 in restitution.

The case was presented to a federal grand jury following an investigation by the IRS and the U.S. Secret Service.