Facing charges of mail fraud and conspiracy to defraud the IRS, a Hawaii woman pleaded guilty on May 22 to attempting to steal more than $464,000 by filing a false individual income tax return and to trying to defraud her mortgage lender.
According to court documents, Hannah Heart of Honolulu, along with her co-conspirators, created a fake 2014 tax form purportedly issued by a mortgage lender to Heart, which she attached to her return.
The form falsely reported that Heart had received income from a financial institution of more than $2.4 million, from which over $1.2 million in taxes had been withheld. As a result, Heart filed a tax return that falsely claimed she was entitled to a $464,904 refund, which the IRS paid.
When the IRS tried to collect the fraudulent refund from Heart, she took several actions to obstruct them, including depositing the refund check into a trust bank account and immediately transferring most of the funds to another account she controlled. She also sent multiple fraudulent and frivolous letters to the IRS in response to IRS communications.
Heart helped a co-conspirator commit similar fraud by depositing another $1 million refund check from the IRS. Overall, she caused a tax loss of $1.6 million
Heart also defrauded her mortgage lender with the help of others. She took out a mortgage in 2006 but stopped payments in 2010. The lender started foreclosure in 2022. A co-conspirator submitted a fake check, which was initially accepted but then rejected as fraud. Heart demanded acceptance of the fraudulent check as full payment, aiming to defraud the lender of more than $2 million.
Heart will be sentenced at a later date. She faces a maximum penalty of 20 years in prison on the charge of mail fraud and a maximum penalty of five years in prison for the charge of conspiracy to defraud the IRS. She also faces a period of supervised release, restitution and monetary penalties.