Councilwoman under criminal investigation after we uncover trail of fraud

ATLANTA — A Hapeville city councilwoman accused of stealing more than $100,000 from a family member has a lengthy history of fraud, schemes and complaints that may have cost Georgians millions of tax dollars.

After a month-long investigation, Channel 2 Action News and The Atlanta Journal-Constitution asked Georgia's Department of Revenue about Ruth Barr and B&B Accounting and Tax Service, including repeated complaints that she preyed on her tax clients.

The state immediately opened a criminal investigation, alleging Barr prepared thousands of suspicious tax returns which inflated the value of her clients' refunds.

"I trusted her to do my taxes for 30 years," said Nongyao DeLong Key, "Your accountant is the person that knows everything about you."

Barr is not an accountant, she is a tax preparer, and has her own trail of foreclosures, tax liens, and lawsuits, according to public records obtained by Channel 2.

DeLong Key didn't know about those when her ex-husband passed away, leaving her access to a large bank account they'd shared.

"I was in an emotional roller coaster," DeLong Key recounted the period in her life when Barr approached her with a real estate investment to buy an office building.

"I at first said no, I'm not interested in investing in property," recalled DeLong Key, "And so she said, 'Oh, well how about a loan?'"

At 6 percent interest, it seemed like a good idea.

She accepted Barr's promissory note for monthly repayment and gave her $182,354.

But Barr never bought the building.

"I was sending letters, emails and phone calls to say please give me a call, what's happening," said DeLong Key, "It's my whole life savings. Faith in people, it hurts."

She was unaware that another tax client of Barr's had filed a lawsuit the year before.

Margaret Turner alleged fraud and deceit after she loaned Barr money and wasn't repaid. She eventually dismissed her lawsuit once Barr repaid the money.

DeLong Key filed her own lawsuit in 2014, and won a fraud judgement against Barr for $237,000.

Barr hasn't paid a penny, even though bank records show she had found another windfall just months earlier; $109,000 for another supposed real estate investment.

"My father was devastated. He was sick, and he kind of just gave up after we found out the money was gone," said Leslie Bass-Tovar.

Her father passed away just eight weeks after he found out he'd lost his retirement savings to Barr, his own sister-in-law.

Barr had convinced Bass to cash out his IRA and invest in an old house in Hapeville.

"She knew how to do that and we had faith and trust that she would," said Bass-Tovar.

After all, Barr was family.

But she picked up the check from his hospital room, deposited it into her business account and started spending.

Bank records show she blew through the entire amount in just 30 days.

She never purchased the house for the investment.

"I want to see her held accountable for what she's done; I want to see her go to jail," said Bass-Tovar, "It seems as though she has found a way to find people at their most vulnerable state and take advantage of them."

BOGUS BUSINESS ABOUND

A grand jury indicted Barr for stealing from her family just one day after Hapeville voters elected her as a city councilwoman.

"It is a family matter basically and it's a family that got upset over something that shouldn't have been upset over," Barr told investigative reporter Jodie Fleischer after a recent court appearance.

But her niece, Bass-Tovar, says otherwise, "No, that's not the case at all. She stole my father's retirement."

Fleischer also attempted to ask Barr about the money she owes DeLong Key.

"That's something else entirely and I'm not going to discuss it," said Barr.

Fleischer reminded Barr about a deposition where she promised under oath that she would repay DeLong Key, but never did.

"Yes, I know," Barr replied, adding, "And I'm done."

Barr walked away, refusing to answer any more questions about DeLong Key, or about the many tax clients who are now in trouble with the IRS and Georgia's Department of Revenue.

Barr's tax office has an "F" rating from the Better Business Bureau, with five unanswered complaints.

"I figured that she knew exactly what she was doing, that's why I went back year after year," said Rusty Perkins, who has been a tax client of Barr's for decades.

Rusty and his wife, Jennifer, enjoy their weekends reenacting Civil War battles.

They both have full time jobs, so it's a hobby.

"I work for a company she works for a company, we have no business expenses," said Rusty.

But you wouldn't know that from the tax returns Barr filed.

"I always liked the fact that she was able to find the refund and I didn't think nothing about it," said Rusty.

Then he got an audit notice from the IRS questioning the couple's Civil War reenactment "business."

"I was kind of dumbfounded. I don't know what I can and can't deduct, that's why I use a CPA," said Rusty.

Again, Barr is not a certified public accountant (CPA), although many of her clients thought she was.

IMMEDIATE ACTION – CRIMINAL INVESTIGATION

Channel 2 contacted Georgia's Department of Revenue to inquire about any prior disciplinary action against Ruth Barr and found there is absolutely no oversight for tax preparers in Georgia.

Anyone, including felons, can hang out a shingle and go into business as a tax preparer immediately with no training or license, which puts all potential clients in jeopardy.

State investigators examined a one-year sampling of Barr's clients'  tax returns and opened an immediate criminal investigation, noting that more than 80 percent appear to be suspicious and possibly fraudulent.

"We started noticing some schemes that she was using to inflate the refund amount for taxpayers," said Georgia Department of Revenue chief investigator Josh Waites.

On Friday, investigators hauled away Barr's filing cabinets, boxes of paperwork and two dozen computers in a search warrant that alleges tax fraud, false statements and forgery.

"She's smart," said Waites. "She keeps it keeps it kind of middle of the road. There's not a lot of red flags that pop up, that's how she's flown under the radar for so long. The more we look at, there is definitely a pattern she uses. There are questionable returns."

• GALLERY: Evidence photos from raid at Barr's office

Waites says it could take months to go through all of the documents seized, and that Barr may have cost the state millions in fraudulent refunds.

"Every taxpayer in the state of Georgia is a victim," said Waites, adding that this has become one of their largest cases ever involving a tax preparer.

"It's a buyer-beware situation today and it would be important that taxpayers do their homework before they engage with a tax preparer," said Georgia Revenue Commissioner Lynne Riley.

Riley was not surprised the state had no inkling of Barr's case previously.

"There is not a board or an agency that a taxpayer could directly report on the situation because of the lack of licensing," Riley added.

Barr could face prison time and be forced to pay a $5000 fine for each fraudulent return.

TAX TROUBLE FOR THOUSANDS

Barr isn't the only one in trouble.

Thousands of her clients are now on the hook, whether they knew their refunds were bogus or not.

"They got the money, they didn't deserve it, and they're going to have to pay it back," said Waites.

Thousands may have to pay back the refunds plus penalties and interest.

The Perkins already owe the IRS more than $5000.

"We're getting by, but it's a little tough," said Rusty Perkins.

His wife, Jennifer, added, "It'd be a lot easier if we didn't have to pay."

They would both like to see Ruth Barr pay as well.

"I think she needs to be put out of business and she needs to spend some time behind some bars," said Rusty.

Barr didn't want to answer to any of it.

"I am done, there are no comments left that I will make," said Barr, disregarding questions about her tax clients' complaints and the rest of her history.

Waites says Barr is also suspected of failing to report her employees' income to avoid paying the taxes.

Another red flag was the high volume of returns from Barr's tiny Hapeville office. It filed more than 20,000 returns in the last four years, all of which are now under scrutiny.

Several clients noted Barr's popularity was due to her ability to find clients refunds when other tax preparers couldn't; some thought that was based on her knowledge of the tax code.

Many said they trusted her because of her reputation in the Hapeville community, including her past service on the city council.

But the Perkins wonder about her recent re-election.

"If she's willing to play the numbers with us as individuals that are paying her to do her job, what's she going to do with a city's money?" said Rusty.

Leslie Bass-Tovar is distraught that her aunt destroyed her own family's trust and the financial security of so many others.

"I don't think you can have this many things happen one after the other and it be accidental. It's habitual is what it is, and it's predatory," said Bass-Tovar.

If you were a client of Ruth Barr and/or B&B Accounting and Tax Service, you are urged to review your last four years of tax returns and contact Georgia's Department of Revenue at the following email: dor.osi@dor.ga.gov

Cox Media Group