A Texas family’s effort to turn fake trusts into legitimate tax refunds ended with federal prison sentences, concluding a multimillion-dollar fraud scheme that prosecutors say continued despite multiple warnings from the IRS.

Following a jury trial in Fort Worth in December 2025, four family members were convicted of participating in a scheme to file false tax returns in the names of purported trusts they controlled. This week, three of those defendants were sentenced to prison time for their roles in the conspiracy.

According to the indictment, the scheme dates back to at least 2016 and involved the creation and use of multiple alleged trusts, including Bravi El Bey Trust, Vaga El Bey Trust, DNB Industries Trust, Linette Trust, and Ezekiel Bey Trust. Each defendant was associated with a specific trust, often serving as the named trustee.

The scheme itself was a family affair involving David Hunt, his twin sons Brandon Hunt and Baylon Hunt, and Corey Burt, who was the half-brother to the twins (David Hunt’s son from a different relationship).

Prosecutors allege the family created the appearance of legitimate entities by filing assumed name certificates and obtaining Employer Identification Numbers (EIN) from the IRS. They then used those entities to file Forms 1041 (trust income tax returns) and 1041-NR (non-resident trust income tax returns), claiming refunds based on false representations of income, withholding, and payments. The filings were an effort to pocket more than $8.5 million in refunds, and claims per return ranged from tens of thousands of dollars to more than $2.2 million.

To collect the money, the defendants opened bank accounts in the names of the trusts, then transferred the funds between accounts or used them for personal expenses. Overall, they stole more than $1.7 million in fraudulent refunds which prosecutors said were divided among the defendants and spent on luxury goods, furniture, cryptocurrency, a Cadillac Escalade, and a home in Mississippi.

When the scheme started to unravel, family members attempted to obstruct IRS collection efforts by submitting additional fraudulent documents. Those included fabricated financial instruments and purported bonds with face values in the hundreds of millions—and even billions—of dollars. And, despite receiving warning letters from the IRS, they continued to submit false returns and related documents.

These tactics have appeared in other tax fraud and fringe financial schemes, especially some tax protester and sovereign-style schemes, although these court filings did not explicitly label them as such (prosecutors simply called them illegal). For purposes of these kinds of schemes, a sovereign citizen is someone who claims to be outside the authority of federal and state laws, often relying on unsupported legal theories to argue they are not subject to taxes, courts, or government regulation. These can include 1099-Original Issue Discount scams, which falsely claim that taxpayers can create or access fictional financial credits to offset income or claim refunds.

One extra twist during this prosecution? According to authorities, the U.S. Marshals Service was required to locate and arrest three of the defendants after they failed to show up mid-trial.

Jury Convictions and Sentencing

A jury found all four defendants guilty of conspiracy to defraud the United States.

Conspiracy charges mean that two or more persons agreed to commit a crime (in this case, defraud the United States) and the defendant joined, knowing the purpose of the scheme and intending to help accomplish that purpose.

Brandon Hunt was convicted on multiple counts tied to specific trust filings across several years, as well as a false return filed in his own name. David Hunt and Corey Burt were also convicted on multiple counts related to returns filed for trust entities. Baylon Hunt was acquitted on two counts, even as the jury found him guilty of conspiracy.

Charges relating to aiding and assisting false returns mean that the defendant (or defendants) help create false returns—whether by preparing them, supplying false information, or directing others to file them.

As a result, David Hunt was sentenced to a total of 92 months in prison. That included 60 months for the conspiracy count and 32 months for two counts of aiding and abetting the preparation of false tax returns. Those terms running concurrently but consecutively to the conspiracy count, meaning they’ll be served at the same time rather than back-to-back.

Corey Burt was sentenced to 94 months in prison, while Baylon Hunt received a 38-month sentence. A fourth defendant, Brandon Hunt, is set to be sentenced in May.

In addition to prison sentences, the defendants were ordered to pay $1,774,864 in restitution, jointly and severally. The court did not impose a fine on David Hunt, citing a lack of financial resources, and ordered two years of supervised release following his prison term.

What This Means for Taxpayers

The IRS has long warned that while legitimate trusts serve recognized purposes, such as estate planning and asset management, arrangements intended to hide income or obscure ownership do not offer tax benefits and are considered abusive.

Schemes like this often depend on layers of entities and official-looking documents, but the core rule remains the same: income is generally taxable to the person who earns it. You can’t simply create an entity to generate deductions or credits because personal expenses stay personal (and not deductible), whether inside or outside of a trust or other entity.

The IRS says that it continues to actively examine these arrangements and has made clear that participants risk significant civil penalties and, in some cases, criminal prosecution.

© Forbes