A 66-year-old Honolulu woman is headed to federal prison for a year and a half after admitting she helped pull off a tax-refund scam that siphoned more than $1.6 million from the IRS. Prosecutors say she joined a tight-knit network that churned out bogus tax returns, funneled the illegal refunds through local businesses and sham trusts, and tried to bury the money with rapid-fire transfers before investigators could claw it back.
The sentencing caps a multi-year federal probe that focused on fake lender forms, trust accounts, and a cast of recruits who allegedly signed on to file doctored returns padded with phony withholding claims.
Plea and charges
Hannah Heart pleaded guilty in May to conspiracy to defraud the United States and to mail fraud. In court, she admitted taking part in filings that sought tax refunds she knew she did not deserve, according to prosecutors. They say Heart and her co-conspirators created fabricated mortgage-lender paperwork, deposited the resulting refund checks into trust accounts, and quickly shifted the money into other accounts to frustrate the IRS’s recovery efforts. IRS Criminal Investigation.
How prosecutors say the fraud worked
Court filings lay out a playbook that started with false tax returns and ended with cashier’s checks to paid recruits. Prosecutors say Heart filed a bogus amended return for 2014 that claimed a $464,904 refund and a 2015 return that sought $1,134,902, both built on fake lender forms that made it look like large amounts of tax had been withheld on her behalf.
Investigators allege conspirators opened accounts in the names of sham trusts, routed the IRS refunds through multiple accounts, and then cut cashier’s checks to compensate the people who helped prepare and file the fraudulent paperwork. The scheme and related filings were detailed in a federal indictment unsealed in 2021, according to the U.S. Attorney’s Office for the District of Hawaii. U.S. Attorney’s Office, District of Hawaii.
Sentence and restitution
On Saturday, a federal judge sentenced Heart to 18 months in prison and ordered her to pay $1,618,985.54 in restitution. The Honolulu Star-Advertiser, which first reported the ruling, noted that Heart had entered her guilty plea earlier this year. One of her co-defendants, Sook Young Jung, previously received a seven-month sentence in connection with related charges. Honolulu Star-Advertiser.
Prosecution and investigation
The case was investigated by IRS Criminal Investigation, the Treasury Inspector General for Tax Administration and the FBI. Trial attorneys from the Justice Department’s Tax Division and the U.S. Attorney’s Office handled the prosecution, including Tax Division lawyers Sarah Kiewlicz and Megan Jones and Assistant U.S. Attorney Gregg Paris Yates. U.S. Attorney’s Office, District of Hawaii.
Heart is required to repay the full restitution ordered by the court and will serve a period of supervised release after her prison term. Federal authorities say other defendants tied to the wider refund network have already faced charges or convictions as they continue to unwind the scheme.
