Pennsylvania Tax Preparer Sentenced to Prison for Defrauding Taxpayers

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SCRANTON, PA — The United States Attorney’s Office for the Middle District of Pennsylvania announced that on January 18, 2023, Donald Royce, age 46, of Orlando, Florida, was sentenced to 46 months in prison by U.S. District Court Judge Robert D. Mariani, for defrauding taxpayers of more than $250,000.

According to United States Attorney Gerard M. Karam, on May 16, 2017, Royce was indicted on one count of mail fraud and eight counts of filing fraudulent tax forms.  Following indictment, Royce alleged he was incompetent to stand trial due to a head injury that he claimed occurred in August 2013.  Between 2019 and 2021, Royce was evaluated by numerous medical professionals to assess his claims of traumatic brain injury. Evaluators reported that Royce presented with “cave-man” speech and claimed he was unable to understand his charges or assist his attorney in his defense.  Following a two-year delay in the prosecution of his case, the Court held a competency hearing on November 22, 2022, where a neuropsychologist testified that there was no medical basis for Royce’s allegations. Based on the medical evidence that Royce was malingering—or faking his symptoms—Judge Mariani found Royce competent to stand trial.

Royce pleaded guilty on March 7, 2022, to one count of mail fraud charge and one count of tax fraud. In pleading guilty, Royce admitted that, as a tax preparer working in Scranton, he defrauded a number of local taxpayers in 2014. After providing the victim taxpayers with a “client copy” of their tax return that showed the correct refund amount, Royce submitted fraudulent tax returns to the IRS that inflated the refund due. After the IRS sent the refund to Royce, the defendant kept the difference between the legitimate refund amount and the higher fraudulent amount for his own personal use.  In one case, Royce instructed the victim clients to provide him with their tax payment and instead forwarding the payment to the IRS, Royce kept the payment for himself.  Due to Royce’s actions, his victims suffered more than $250,000 in losses.

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At the time of sentencing, Judge Mariani found that Royce’s intentional actions to feign incompetency amounted to obstruction of justice which increased his sentencing guidelines exposure.  In addition to the term of incarceration, Judge Mariani imposed a three-year term of supervised release to be served upon release from prison. The Court further ordered that money seized from Royce be used to pay more than $336,000 in restitution to over forty victims and the IRS, and that Royce must forfeit over $155,000 in proceeds of his crimes.

The case was investigated by the Internal Revenue Service, Criminal Investigations.  Assistant United States Attorney Jenny P. Roberts prosecuted the case.

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