Tax Fraud is Rampant: These Two Cases Will Give You an Idea of What to Look Out as the 2022 Tax Season Approaches
As tax season approaches, we must all look out for suspicious behavior which may be a sign of tax fraud. Here are two eye-opening cases to consider.
California Man Convicted for Multimillion Dollar Tax Fraud Involving Professional Athletes and PPP Loan Fraud
The first case involves a California man who was sentenced to 10 years in prison for conspiring with others to defraud the IRS and the Payment Protection Program (PPP).
Allegedly, 55-year-old convicted felon and Secretary, Director and Chief Financial Officer of Los Angeles tax preparation company, Mana Tax Services Quin Ngoc Rudin used his company to commit two fraud schemes while on supervised release.
The first scheme involved Rudin conspiring with his brother Thanh Rudin, 59, and associate Seir Havana to prepare and file false income tax returns representing at least 9 professional athletes. The returns reported false business and personal losses to get the athletes refunds they were not eligible for. He also amended tax returns from previous years to correct “errors’ made by prior accountants.
He charged the athletes 30% of their refunds resulting in a total tax loss of over $19 million.
The other scheme involved Rudin conspiring with associate Milton Estrada, 49, to prepare and submit false applications for PPP loans on behalf of small businesses, shell companies and other businesses they owned. The PPP loan offers financial assistance to businesses struggling due to the pandemic. He charged his clients 30% of the loan they would be receiving. He also falsified tax returns to support the applications.
Rudin committed these crimes while on supervised release for another fraud scheme in California. He pled guilty to one count of conspiracy to defraud the United States and to commit wire fraud as well as one count of wire fraud. The three other conspirators have also pled guilty.
Man Arrested for Impersonating an IRS Employee and Filing False Tax Returns in Tax Fraud Scheme
A man was arrested for filing fraudulent tax returns costing his clients thousands of dollars. He was accused of impersonating an IRS officer claiming he could get his victims large sums of money if they applied to a fictitious IRS program.
52-year-old Francisco Ivan Velasquez was charged with three counts of wire fraud, two counts of impersonating a United States officer or employee and five counts of assisting in the preparation of false tax returns. The superseding indictment was filed on August 30, 2022, and unsealed when the defendant made his initial court appearance on October 26, 2022.
Allegations stated that Velazquez told victims he was an IRS employee and was able to secure large refunds for them from the IRS. He claimed that the funds were available through a supposed IRS program which allowed people who had lost a home in a foreclosure to recoup the money by filing an IRS application and providing certain documents. He told them that he would apply on their behalf to recover the funds in exchange for a fee.
He also told the victims he would prepare and file tax returns and other documents with the IRS that would qualify them for a tax refund of over $100,000. The activity occurred between March of 2016 and March of 2018.
Velasquez is currently facing a statutory maximum penalty of 20 years in prison for each count of wire fraud and three years for each count of filing a tax return and for each count of impersonating an officer of the United States.
Don’t fall for tax fraud scams this tax season. Make sure you work with someone that’s qualified to get the job done correctly. Ask for a PTIN number and even go a step further by choosing a preparer from the IRS tax preparer directory. Tax preparers on this list have completed continuing education to ensure they are up to date with the latest in tax law.
Interested in learning more about taxes? Look up a Latino Tax Pro instructor in your area.
We wish you the best of luck getting your taxes done safely and securely this coming season.