Snowball Effect | Hawaii | Income Tax Fraud

Hannah Heart tricked the Internal Revenue Service (IRS) into paying over a million dollars in a multi-person income tax return scheme, with the very same fake tax documents that she first created for her own tax return. Heart made a fake form that looked like it came from a bank and mortgage company. In 2014, Heart created the fake form to say that she had earned over $2.4 million, and that more than $1.2 million had already been withheld for taxes. Because the government thought she had paid so much in taxes, they sent her a refund check for $464,904. Certainly, an above average tax return!

A one-time success, even in fraud, can snowball to more. Even where it never snows! From 2015 to 2019, using the same fake forms Heart found success with, she and her co-conspirators recruited at least five other people to file false tax returns to get refunds. As a result, they fraudulently received over a million dollars in income tax returns that they did not deserve. Heart created fake trusts and opened bank accounts in the name of the trusts to conceal the proceeds and quickly moved most of the money to another account she controlled. To prevent the IRS from recovering the money, she sent many false and misleading letters to the IRS to confuse them and slow down their efforts in putting a stop to her schemes.

All that effort does not thwart the IRS in stopping fraud. On May 24, 2025, Heart pled guilty to false tax returns, conspiracy to defraud the U.S. and to mail fraud.

Great job by the IRS Criminal Investigation in this case.

Today’s Fraud of The Day is based on article “Honolulu woman, 66, pleads guilty in $1.6M federal tax fraud” published by The Honolulu Star-Advertiser on May 24, 2025.

A Honolulu woman pleaded guilty Thursday for her to file false tax returns and use Hawaii businesses, banks and trusts to launder the refunds. The scam cost the Internal Revenue Service more than $1.6 million.

Hannah Heart, 66, of Hono ­lulu entered into a plea agreement with the U.S. Department of Justice on Thursday when she also pleaded guilty to conspiracy to defraud the U.S. and to mail fraud. Heart caused a tax loss to the IRS of $1, 618, 985.54. She is free on bond until sentencing Sept. 8. Her co-conspirator, Sook Young Jung, accepted a plea agreement March 20, 2024, and pleaded guilty to conspiracy to defraud the federal government. Jung will be sentenced Sept. 25.