DES MOINES, IA – An Ottumwa man and woman were convicted of conspiring to defraud
the Internal Revenue Service by filing hundreds of fraudulent tax returns and of defrauding
applicants out of unemployment insurance benefits and the Iowa Workforce Development out of
benefits payments.
On May 22, 2023, Thein Maung, 47, pleaded guilty to 49 fraud and tax charges. On June 2,
2023, a federal jury convicted Phyo Mi, 21, of 16 fraud charges. According to court documents and
evidence presented at Mi’s four-day trial, Maung and Mi ran a fraudulent tax-preparation business
out of their family’s Ottumwa home. In exchange for a cash fee, Maung and Mi prepared and filed
their customers’ tax returns. Maung and Mi primarily catered to immigrants and refugees who
worked at meat-packing facilities in Iowa and who had little or no ability to read, write, or speak
English.
Without their customers’ knowledge or approval, Maung and Mi included on their
customers’ federal tax returns, schedules, and forms, fraudulent items, such as false claims for
residential energy credits, business-expense deductions, or moving-expense deductions for members
of the United States Armed Forces. The effect of Maung and Mi including fraudulent items on the
tax documents was to increase the refunds their clients received and increase Maung and Mi’s
customer base. In all, from 2018 to 2022, Maung and Mi caused over 1600 tax returns to be filed
from their Ottumwa residence. The fraudulent tax returns claimed over $3.5 million in residential
energy credits.
From 2018 to 2022, Maung and Mi received approximately over $200,000 in cash fees from
their customers. In addition, on their customers’ returns, Maung and Mi sometimes directed portions
of the fraudulent refunds be sent to financial institution accounts accessible to Maung and Mi.
Maung and Mi also offered to help customers apply for unemployment benefits from Iowa
Workforce Development. Without their customers’ knowledge or approval, Maung and Mi
submitted materials to Iowa Workforce Development directing that their customers’ benefits
payments be sent to financial institution accounts that Maung and Mi had access to. From
October 2020 through March 2021, Maung and Mi directed nearly $100,000 in fraudulent
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unemployment insurance benefits payments be sent from Iowa Workforce Development to their
accounts, instead of to the eligible claimants.
“This guilty verdict brings Phyo Mi and Thein Maung to justice. They created and
implemented this massive energy credit and false deduction scheme to fund their greed at the
expense of trusting taxpayers,” said Special Agent in Charge Thomas F. Murdock of the IRS
Criminal Investigation St. Louis Field Office. “This conviction should serve as notice that we will
vigorously prosecute those criminals who engage in any form of tax fraud.”
Sentencings for both Maung and Mi are scheduled for September 27, 2023, in Des Moines,
before Chief United States District Court Judge Stephanie M. Rose.
United States Attorney Richard D. Westphal of the Southern District of Iowa made the
announcement.
The investigation was conducted by Internal Revenue Service Criminal Investigation and the
Ottumwa Police Department. Assistant United States Attorneys Kyle Essley and Laura Roan
prosecuted the case.