Five people are facing multiple charges for scamming the U.S. Government out of millions of dollars.
Authorities say the ringmaster was already serving a life sentence in prison.
Authorities say an inmate at Taylor Correctional Institution masterminded a scheme that resulted in false tax refunds of more than three million dollars.
Robert L. "Skip" Jarvis, Jr., State Attorney-Third Judicial Circuit, said,"This money is being stolen right out of our treasury by inmates and others with the prison system and I intend to put a stop to it."
46-year-old Timothy Coughlin, who's already serving a life sentence, is charged with racketeering, nine counts of identity theft, nine counts of forgery, money laundering, and conspiracy.
One of the co-conspirators, Illia Alisha Hale, was a corrections officer at the time at TCI.
She hid from cameras, but Eyewitness News was able to catch a glimpse of her ducking down in the front seat of an SUV while she was being taken to the Taylor County Jail Tuesday.
Area resident Carolyn Demps said, "We need to worry about the integrity of the people that's working to make sure that folks like me and other folks in this county get what they deserve and it's not going to the prison. I have a hard problem with that."
Jarvis says Coughlin stole identities, mostly from other inmates, and made fake W-2 forms to file tax returns.
The IRS electronically deposited the tax refunds into an account.
Hale and three other outside people--David Allen Wingard, Margaret Windgard Banks, and Rhonda Bellamy Tellier--helped by hiding and spending the money.
Jarvis says all of the refunds ranged from $2,200 to $7,000 each, which he says stayed just below the IRS's fraud radar.
"We would have preferred for the Feds to take this, but since the Feds are not going to do that, we have state charges that we can file to try to put a stop to this because this is essentially an absolute theft form the taxpayers of this country." Said, Jarvis.
Authorities say the scheme was in June 2007 when officers found tax returns and W-2s in Coughlin's cell during a cell check.
Authorities say Coughlin admitted to performing the fraud for several years.
Jarvis said that this type of fraud happens in state and federal prisons throughout the state of Florida, especially during tax season.
He says that the U.S. State Attorney's Office nor the IRS has ever prosecuted any of the incidents and say he believes that this is the first case to be prosecuted in our area.
If convicted on all counts, each person could get up to 140 years in prison.
Coughlin has been moved to the Santa Rosa state prison. Hale was fired from TCI last year and was working at FSU when authorities arrested her.