Ottumwa Pair Receives Sentence for Fraudulent Scheme

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Two Ottumwa residents received their sentences in federal court for defrauding the IRS, Iowa Workforce Development, and numerous citizens.

47-year-old Thein Mauang and 21-year-old Phyo Mi each pleaded guilty to fraud-related and tax-related charges. Maunang was sentenced to 12 years in prison. Mi received a nine-year sentence.

Court records say for several years, Mauang and Mi ran a fraudulent tax preparation business from their Ottumwa home. In exchange for a cash fee, Maung and Mi would prepare and file 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 fraudulent items on their customers’ federal tax returns, like 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 residence. Those returns claimed over $3.5 million in fraudulent residential energy credits.

It is estimated that from 2018 to 2022, Maung and Mi received over $200,000 in cash fees from their customers. In addition, on their customers’ returns, Maung and Mi sometimes directed that portions of the fraudulent refunds be sent to financial institution accounts accessible to Maung and Mi. As a result, Maung and Mi obtained nearly $50,000 in fraudulent tax refunds.

Maung and Mi also offered to help customers with applying 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. Maung and Mi obtained nearly $70,000 in fraudulent unemployment insurance benefits payments be sent from Iowa Workforce Development to their accounts, instead of to eligible claimants.

At sentencing, Chief United States District Court Judge Stephanie M. Rose described Maung and Mi’s fraud as being elaborate and extensive, involving layers of subterfuge, and victimizing hundreds of vulnerable immigrants and refugees with little education and limited English fluency.

Following their prison terms, Maung and Mi will be on supervised release for three years. There is no parole in the federal system.

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