A Los Angeles woman, charged with trying to get $1.2 million in U.S. tax refunds on 10 million gallons of aviation fuel she never purchased, pleaded guilty Thursday to mail fraud and filing false claims with the Internal Revenue Service.
Kathleen G. Kinal, 30, will face a maximum penalty of 15 years in prison and a $21,000 fine at her June 12 sentencing before U.S. District Judge Laughlin Waters in Los Angeles.
"This was one of the most significant fraud schemes ever pulled against the IRS by just an average citizen," Assistant U.S. Atty. Carol A. Chase said after Kinal entered her guilty pleas.
The prosecutor said that, in a period of about one year, Kinal filed 120 claims for refunds on excise tax payments she claimed to have made on jet fuel and gasohol purchases she claimed to have made.
"All of the claims were made in her real name but with different Social Security numbers and post office box addresses," Chase said. "Basically, she was a transient who took temporary jobs and then obtained 1040 tax forms and refund applications."
On the tax refund forms, she listed her occupation variously as aviator-navigator, aviator-explorer, and free-lance writer. In fact, Chase said, Kinal had no pilot's license and no affiliation with any aviation activity.
IRS investigators declined to reveal how they tripped up Kinal. But a source close to the investigation said one factor that led to the scheme's being uncovered was that "she got really greedy on one form and checked off the box claiming she was legally blind to increase the amount of the refund."
Before the scheme was discovered, she was paid $56,000 in refunds, according to court documents.