Seaside Heights Man Admits Defrauding IRS From Prison

Crime paid for one Seaside Heights man and his associates – while they were already behind bars – until IRS agents cracked his scheme to collect fraudulent refunds from Uncle Sam.

Jerry Julian, 47, admitted Monday that from approximately September 2006 through early 2007, while he was locked up at Riverfront State Prison in Camden, he operated a scheme to defraud the IRS by helping other inmates at the prison prepare and file false tax returns designed to trigger tax refunds for tax years 2003, 2004, and 2005, to which they were not entitled.

According to a statement from U.S. Attorney Paul Fishman, Julian told his fellow inmates at the facility that the federal government paid the prison minimum wage for their labor, that employment taxes were withheld from those amounts, and that the prisoners were entitled to claim a refund of the amounts withheld. In reality, prisoners were paid no more than $5 per day from which no taxes were withheld. In all, Julian admitted to filing about 110 false returns on behalf of approximately 60 inmates.

IRS agents investigated the suspected scam and levied charges, to which Julian pleaded guilty on Monday. The scheme resulted in a total tax loss to the IRS of nearly $215,000.

Julian now faces an additional three years behind bars and a maximum potential fine of up to $250,000. According to records from the state Department of Corrections, Julian is currently serving time at the Northern State Prison in Newark for robbery and is due to be released in April 2014.