Three Oklahomans Charged With Running Prison Tax Fraud Ring

Three Oklahoma residents conspired with four California prison inmates to run a tax refund fraud ring that collected more than $219,000 in phony federal tax refunds, according to the U.S. Attorney's Office in Sacramento.

The 10-count indictment unsealed Wednesday charges Donald Harned, 68, of Oklahoma City; Edwin Ludwig III, 57, of Tulsa; and Edwin Ludwig IV, 32, who is in the Cimarron Correction Facility in Cushing with conspiracy to defraud the government with false, fictitious or fraudulent claims.

Federal Indictment

According to court documents, beginning in March 2011 Edwin Ludwig IV with help from fellow inmates obtained personal identification information of other inmates at a state of California correctional center. Harned and several others then filed false income tax returns with the IRS, according to the documents.

Prosecutors said refunds were deposited into accounts controlled by the defendants.

According to the indictment, the investigation into the conspiracy began on January 11, 2012, when a correctional officer found some records behind Edwin Ludwig IV's personal locker.

Prosecutors said the men filed about 250 false income tax returns with the IRS and receiving about 140 refunds worth more than $219,000.

Donald Harned and Edwin Ludwig III were arrested at their homes in Oklahoma City and Tulsa.

Federal officials say Edwin Ludwig III was released following his arrest and ordered to appear in Sacramento federal court on March 12, 2014.