Crime

Prominent businesswoman pleads guilty to tax fraud in South Florida

CPA Pamella Watson
CPA Pamella Watson Miami Herald staff

A South Florida accountant who was viewed as a symbol of Jamaican middle-class success with connections to politicians in her native country pleaded guilty on Friday to pocketing millions of dollars in false income-tax refunds from the U.S. government.

Pamella Watson, 60, who has been detained since her arrest in May, was convicted of a single wire-fraud offense in a plea agreement filed in Fort Lauderdale federal court. She faces up to 20 years in prison at her sentencing on Dec. 4 before U.S. District Judge James Cohn. A slew of other charges, from filing fictitious tax returns to laundering ill-gotten refunds, will be dropped as part of the deal with the U.S. attorney’s office.

According to court records, Watson exploited hundreds of unwitting clients — many among Jamaica's diaspora in South Florida — by changing their actual tax returns and filing inflated refund claims without their knowledge. Prosecutor Neil Karadbill called her scheme “affinity fraud.”

Watson deceived the IRS by keeping $3.4 million in “excessive” tax refunds for herself and giving the clients their actual refunds between 2011 and 2014, according to court records. She avoided detection by splitting the refund deposits into bank accounts that she controlled through her tax preparation business.

Watson also used another $279,000 in IRS check payments made by some of her clients to pay off her own income-tax obligations, records show.

“Watson’s clients did not know that she was filing tax returns with the IRS that were different than the copy provided to them,” said Kelly R. Jackson, special agent in charge of the IRS’ criminal investigations office in South Florida. “It is unfortunate that these taxpayers trusted Watson and that she violated that trust.”

Watson, a naturalized U.S. citizen, worked as a certified public accountant at her tax preparation office in Miami and lived in Davie. She once hosted a fundraiser on behalf of Jamaican Prime Minister Portia Simpson Miller and another at her lavish Davie home for former Prime Minister Andrew Holness. Watson was involved in numerous South Florida organizations and served on several boards, including the Jamaican Women of South Florida.

After her arrest by IRS agents in May, a magistrate judge described Watson as a “well-educated professional who clearly knew that what she was doing was wrong.”

Magistrate Judge Alicia Valle ordered Watson’s detention after concluding she was a flight risk to her native country, noting that she has between $700,000 and $1.4 million in assets in Jamaica. The magistrate also noted that Watson “lied” to the federal court’s probation office “by failing to disclose that she owns an apartment in Jamaica and has substantial assets there.”

As part of her plea agreement, Watson has agreed to repay the IRS with some of those assets.

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