Dozens in Inland Empire indicted in huge tax fraud scheme
Neil Nisperos, Staff Writer
Posted: 10/03/2011 12:25:41 PM PDT
A federal investigation into the practices of two San Bernardino County tax service companies has resulted in one of the largest indictments issued for tax fraud, federal officials said.
The Fontana-based Old Quest Foundation Inc. and Rancho Cucamonga-based De la Fuente and Ramirez and Associates filed false federal income tax returns containing bogus claims for refunds that sought more than $250 million, officials said.
The IRS investigation, code named "Operation Stolen Treasures," resulted in 32 federal indictments that name a total of 55 defendants. Nearly half were arraigned in U.S. District Court in Santa Ana.
An additional 27 defendants will receive summons to appear in federal court for arraignments in the coming weeks. A total of 10 defendants are either fugitives or have agreed to surrender.
"What sets this case apart is it's probably the largest tax case in terms of numbers of defendants indicted at one time," said Assistant United States Attorney Charles E. Pell.
"It's definitely one of the largest schemes that we've seen," said Special Agent Linda Lowery.
The indictment related to Old Quest alleges that members of a conspiracy filed returns that collectively reported that more than $1 billion in federal income tax had been withheld. As a result of false claims, the IRS erroneously issued millions of dollars worth of tax refunds, including one check for $1.2 million, authorities said.
Old Quest told its customers they could receive tax refunds of hundreds of thousands of dollars from a "secret government account," according to the indictment. Potential customers were allegedly given "tax defier" presentations telling them that the United States was owned by England and bankrupt.
People falsely claiming to be attorneys, accountants, CPAs and former IRS employees made presentations to potential customers, according to Justice Department officials.
The indictment charges Arturo S. Ruiz, the CEO of Old Quest; Francisco J. Mendoza, the president of Old Quest; and Francisco Mendoza's wife, Maria de Jesus Mendoza, the vice president of Old Quest.
In the De la Fuente and Ramirez and Associates case, Osman Norales, Genaro De La Fuente, Francisco Ramirez and Ulises Linares were indicted on charges of conspiring to defraud the United States by filing more than 35 false income tax returns.
Prosecutors allege the returns claimed more than $80 million in fictitious federal income tax withholding and sought more than $19 million in income tax refunds.
"When people meet with a tax preparer to have a tax return prepared, they should be conscientious of this type of scheme," Lowery said. "If a tax preparer is offering a refund that seems too good to be true, it probably is."
neil.nisperos@inlandnewspapers.com
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