A Mexican national living in Bakersfield is going to prison for leading a major tax fraud scheme.
U.S. Attorney Phillip Talbert announced that Miguel Martinez, 39, was sentenced on Wednesday to six years in prison for the $25 million fraud against the IRS.
Driving the news: Martinez led a scheme to file hundreds of fraudulent tax returns that claimed millions of dollars in refunds from November 2019 through June 2023.
- He used stolen identities to create fake businesses and report fake wage and withholding information for the businesses to the IRS.
- Martinez went on to submit hundreds of individual income tax returns to the IRS in the names of other people whose identities he had also stolen.
Go deeper: Martinez was not alone in his scheme, working with co-defendant Victor Cruz, a tax return preparer in Bakersfield.
- Cruz allegedly helped file some of the fraudulent tax returns.
- Further, a former IRS tax examiner also gave Martinez advice on how to avoid the IRS’ fraud detection systems.
- Martinez paid both of them thousands of dollars and bought them lavish dinners.
The big picture: The IRS paid out $2.3 million in tax refunds as part of the scheme.
- Federal agents found $750,000 in fraudulent tax refund checks, identification cards for over 200 people and multiple firearms that he could not legally possess because he is in the United State illegally when they arrested him and searched his three homes.
- Martinez also lied to government agents when he was first interviewed, saying he had no knowledge of or involvement in tax preparation for others.
What they’re saying: “Martinez sought to steal millions in taxpayer funds meant to provide services for us all,” Talbert said. “Today’s sentence is fitting for someone who embodies such reckless disregard for the law. This office will continue our efforts to bring to justice those who would organize and lead such schemes.”
- IRS Criminal Investigation Acting Special Agent in charge Michael Mosley said agents have worked extremely hard to dismantle the scheme.
- “Today’s sentencing is a true reflection of the collaborative commitment between IRS-CI and the U.S. Attorney’s Office to protect the people in our communities, uphold a fair tax system, and bring justice to light,” Mosley said.
