Whidbey Examiner


Coupeville couple jailed for tax fraud

By JESSIE STENSLAND Whidbey Examiner Co-editor
August 6, 2014 · Updated 2:58 PM

A Coupeville husband and wife were sentenced to federal prison last week for conspiracy to defraud the government and making false or fraudulent claims, the U.S. Attorney’s Office reported.

Debra A. Aaron, 60, was sentenced to five years in prison and Samuel Aaron, 71, was sentenced to 30 months in prison.

Both were also sentenced to three years of supervised release and ordered to pay $723,275 in restitution.

“I can’t find any other motivation for doing this other than greed,” Judge Marsha J. Pechman said at the sentencing hearing. “…The public trust has been violated.”

The Aarons both had lengthy careers as federal employees. Samuel Aaron had a military career and then worked for the Federal Aviation Administration for more than 25 years. Debra Aaron retired as a management consultant for the FAA.

The Aarons promoted a well-known tax fraud scheme known as “1099 OID fraud” in 2008, according to U.S. Attorney Jenny Durkan. They claimed to the IRS that they owed a tax refund of $723,275.

Debra Aaron filed similar bogus claims on behalf of 30 other people for more than $14 million. Some $4 million was paid out before the IRS caught the fraud.

The Aarons used a shell company to launder the proceeds of the scheme and claimed some of the money was used to help impoverished women in third world countries. In fact, they used the money for a home remodel, expensive trips to Sedona, Ariz., the Caribbean, and lavish outings to Las Vegas as well as other luxuries, the U.S. Attorney reported.

Emily Langlie, spokeswoman for the U.S. Attorney’s Office, said Debra Aaron recruited two friends in the scheme.

A woman from Enumclaw was convicted of filing false claims and conspiring to file a false lien against a federal employee after she retaliated against an IRS officer by filing a false, multi-million dollar lien. She was sentenced to a year and a day in federal prison.

A Ravensdale woman was sentenced to six months for filing false claims.


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