Grand jury indicts 55 on tax fraud charges
A federal grand jury has indicted 55 people connected with two Southern California companies accused of filing hundreds of falsified tax returns seeking hundreds of millions of dollars in bogus tax refunds.
The owners of the two companies, Fontana-based Old Quest Foundation and De la Fuente and Ramirez and Associates of Rancho Cucamonga, were charged along with customers, attorneys, tax preparers and other professionals who worked with them.
The indictment accuses Old Quest of filing false tax forms that reported more than $1 billion in withheld income tax and sought more than $250 million in tax refunds. De la Fuente and Ramirez is accused of falsely claiming $80 million in tax withholding and seeking more than $19 million in refunds.
To drum up business, Old Quest promoters held seminars encouraging potential customers not to pay their income taxes. They said the customers could get money from secret government accounts, according to the indictment.
Among other “tax defier” arguments, the promoters allegedly told audiences that the United States is bankrupt, is actually a private company or is owned by England.
Dean Steward, the attorney representing indicted Old Quest President Francisco J. Mendoza, said it was too early to comment on the allegations.
Three of the companies’ co-owners remained fugitives Monday, along with seven other defendants.
Most of the defendants face charges of conspiracy to defraud the U.S. or making false claims against the U.S., with maximum sentences of 10 and five years in prison respectively.
Although tax fraud schemes are common, Assistant U.S. Atty. Charles Pell said, “this is probably one of the largest number of defendants taken down in a tax case.”
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