Columbia, SC - COLUMBIA, SC (WMBF) - A group of 10 people pleaded guilty in federal court Thursday to filing more than 10,000 income tax returns and defrauding the IRS of $13 million, according to Acting U.S. Attorney Kevin F. McDonald.
Each of the 10 defendants pleaded guilty to conspiracy to commit mail fraud and for entering the U.S. without authorization for their involvement in the four-year scheme. They will be sentenced at a later date.
According to investigators, between 2006 and 2009, two tax preparation businesses - Seguros Internacionales, operating in Spartanburg, and Forest City, NC, and Poz Servicios Para Hispanos, operating in Boiling Springs - along with affiliated individuals, filed more than 10,000 federal income tax returns claiming more than $22 million in refunds. Approximately $13 million in refunds were paid by the IRS before criminal investigators discovered that most of the returns filed were fraudulent.
Agents estimate that at least 20 people were involved in operating the scheme in which tax preparers knowingly claimed tax credits or deductions to which filers were not entitled. One such tax credit that was improperly claimed on a majority of the false returns was for child care expenses. This credit can result in a refund even if no taxes were ever paid.
Of the 10 individuals pleading guilty Thursday, nine were characterized in court by Assistant U.S. Attorney David C. Stephens as "runners," who solicited others to have their returns falsely prepared and then assisted them in getting their refund checks cashed.
They are Edgar Carrillo-Borjas, Miguel Angel Carrillo-Borjas, David Hernandez-Juarez, Ariana Canseco-Orozco, Maribel Juan-Orozco, Cristina Sanchez-Perez, Juan Carlos Carrillo-Roy, Carlos Carrillo-Rodriguez, all of Mexico, and Luis Gerardo Mora-Vargas, of Costa Rica.
The 10th individual, Omar Maldonado-Cardenas, of Mexico, was described by Stephens as having an active role running the day-to-day operations at Seguros Internacionales for a period of two years.
Two other individuals associated with the case pleaded guilty to obstruction of justice in federal court in Spartanburg on Feb. 10. Juan Manuel Galban Ortega and Rodolfo Magana Escoto, both of Mexico, admitted to burning documents and records associated with Seguros Internacionales.
On Nov. 17, 2009, a team of approximately 100 law enforcement agents served search warrants and conducted interviews at various locations throughout Upstate South Carolina in connection with the investigation. When agents arrived at the home of Ortega and Escoto, they observed them attempting to burn the documents and records.
All 12 individuals convicted thus far remain in federal custody awaiting sentencing. They face maximum penalties ranging from five to 20 years, depending on their respective levels of involvement in the scheme. All will be deported after completing any custodial sentence imposed.
Four other women were arrested Wednesday and Thursday in connection with the case. Yolanda Poz of Boiling Springs, Lisa Mendoza of Spartanburg, Teresa Bravo of Pacolet, and Ashley Moore of Forest City were charged with conspiracy to commit mail fraud.
The investigation is ongoing and more charges are likely, McDonald said.
Seguros Internacionales and Poz Servicios Para Hispanos have been shut down.