Kathleen Mannion, 58, a former Internal Revenue Service employee from Lawrence, Massachusetts, pleaded guilty on Wednesday in federal court in Boston to charges related to filing fraudulent tax returns and stealing Social Security benefits, according to the U.S. Attorney’s Office.
Details of the Fraud Scheme
Mannion worked as an IRS contact representative in Andover from 1998 to 2009. Between July 2020 and April 2023, she prepared income tax returns for multiple individuals without listing herself as the return preparer, instead making it appear as if the taxpayers had filed on their own.
She intentionally included ineligible dependents on these returns, which resulted in inflated refund amounts that the taxpayers were not entitled to receive—and often without their knowledge.
Mannion then directed a portion of these fraudulently obtained refunds to be deposited into her personal bank accounts, which she used for her own financial benefit.
Separately, between April and October 2020, Mannion also applied for Social Security retirement, spouse, and widow benefits on behalf of other individuals by contacting the Social Security Administration via telephone. Without the knowledge of those beneficiaries, she directed their payments to her own bank accounts and kept the funds.
Legal Charges and Possible Penalties
Mannion pleaded guilty to four counts of aiding and assisting in the preparation and filing of false tax returns, as well as one count of theft of government money. Each tax-related count carries a potential sentence of up to three years in prison, one year of supervised release, and fines of up to $250,000. The theft of government money charge carries a maximum sentence of 10 years in prison, three years of supervised release, and a $250,000 fine.
Her sentencing hearing is scheduled for September 3, 2025.
Broader Implications and Law Enforcement Response
This case exposes the risks of insider fraud within government agencies and highlights the ongoing efforts by law enforcement to uncover and prosecute fraudulent schemes targeting taxpayer dollars and government benefit programs.
Prosecutors emphasized the seriousness of the crimes, noting that Mannion abused the trust placed in her as a former IRS employee and violated the systems designed to support those legitimately in need.
Information sourced from:
- U.S. Attorney’s Office, District of Massachusetts
- NBC Boston
- Associated Press
