55 people have been indicted with connections to a large tax fraud scheme which involves hundreds of falsified income tax returns that sought over $250 million in refunds.
This scheme has been deemed “Operation Stolen Treasures” and while it is not a big blockbuster movie starring Nicholas Cage it is a criminal investigation revolving around two California companies: Old Quest Foundation, Inc and De la Fuente and Ramirez and Associates. Both of these companies were used to file the fraudulent income tax returns in hopes of obtaining their stolen money.
Operation Stolen Treasures has resulted in 32 federal indictments that name a total of 55 defendants, many of whom reside in the Inland Empire. In a takedown that began on Friday, special agents arrested 18 defendants. Additionally, 27 defendants will receive summons to appear in United States District Court for arraignments in the coming weeks. A total of 10 defendants are either fugitives or have agreed to surrender today.
A 19-defendant indictment related to Old Quest alleges that members of a conspiracy filed false Forms 1099-OID that collectively reported that more than $1 billion in federal income tax had been withheld. The indictment alleges a scheme that resulted in more than 400 fraudulent federal income tax returns being filed with the IRS, and those tax returns cumulatively sought more than $250 million in fraudulent refunds. As a result of those false claims to the government, the IRS erroneously issued millions of dollars worth of tax refunds, including one tax refund check for $1,192,653.
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Old Quest – which did business in Fontana under the names Old Quest Foundation and Old Quest Services – promoted the fraudulent scheme by telling customers they could receive tax refunds of hundreds of thousands of dollars from a “secret government account.” During presentations made across the Southland, members of the conspiracy promoted the supposedly secret government account and made other “tax defier” arguments, such as the United States was bankrupt and the United States was actually owned by England. The potential customers heard presentations from people falsely claiming to be attorneys, accountants, CPAs and former IRS employees. Those who chose to sign up were required to make “donations” as high as $10,000 to Old Quest and were required to pay Old Quest a percentage of any refund they fraudulently received.
The 88-count indictment alleges that, in exchange for the payments from the customers, Old Quest prepared and filed false income tax returns that routinely sought hundreds of thousands of dollars – and sometimes millions of dollars – in income tax refunds. One of the tax returns allegedly sought a refund of $4,656,566. According to the indictment, when Old Quest customers received IRS letters warning that their tax returns were frivolous, members of the conspiracy prepared responses and assured customers the IRS sent letters only to “intimidate” them because the “IRS did not want to pay.”
During a search warrant executed at Old Quest’s offices two years ago, IRS agents seized several false tax returns before they could be filed, including one signed tax return that fraudulently reported $10,500,106 in federal income tax withheld and would have sought a $6,868,675 refund.
Allegedly Old Quest brought in around $1 million from customer payments in it’s scheme.
In the scheme related to De la Fuente and Ramirez and Associates (DLFRA) , four people were named in an indictment that alleges a conspiracy to defraud the United States by filing more than 35 false income tax returns that claimed more than $80 million in fictitious federal income tax withholding and sought more than $19 million in income tax refunds. DLFRA used seminars and one-on-one consultations to recruit people, who were charged $2,500 to become customers. According to the indictment, DLFRA operated the same type of fraudulent tax scheme as Old Quest.
Most of those charged in Operation Stolen Treasures face charges of conspiracy and could face up to 10 to 15 years in prison – Source.
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