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Defendant Used Nominee Entity To Hide Her Income

WASHINGTON, D.C. - Eileen J. O’Connor, Assistant Attorney General for the Tax Division, U.S. Department of Justice, Carol C. Lam, U.S. Attorney for the Southern District of California, and Nancy Jardini, Chief, IRS Criminal Investigation, announced today that at the federal courthouse in San Diego, California, Violet Negrete-Jauregui (a/k/a “Violet Maria Negrete” and “Violet Maria Widman”) pled guilty to a charge of a conspiracy to defraud the United States.

Ms. Negrete-Jauregui faces maximum sentences totaling five years imprisonment followed by up to three years supervised release and a $250,000 fine. Sentencing was scheduled for March 14, 2005.

“People who peddle tax scams undermine the integrity of our tax system,” said Assistant Attorney General Eileen J. O’Connor. “In addition, they put themselves and their clients at serious risk of financial loss, civil penalties, and criminal prosecution.”

“There is no magic formula or secret tool to change your income tax liability,” said Nancy Jardini, Chief, IRS Criminal Investigation. “If someone tells you otherwise, check our website at, call the IRS or ask a tax professional.”

On July 29, 2003, a 78-count indictment was returned charging Ms. Negrete-Jauregui, together with Susan Ellen O’Brien, Richard Evans, Jeffrey Barber, and Kathy L. Hill, with conspiracy and other tax violations for their roles in a scheme to conceal their own and others’ income and assets from the Internal Revenue Service. According to the indictment, Ms. O’Brien owned and operated “The O’Brien Group,” a San Diego business that held itself out as providing tax services, including tax return preparation, tax planning, and audit representation before the Internal Revenue Service. Many of those involved with “The O’Brien Group” allegedly received income in nominee names to hide it from the IRS. O’Brien Group clients Stephen Maranto, Forest Buckmaster, and William Cook were also charged with felony tax violations.

In her plea agreement, Violet Negrete-Jauregui admitted she filed fraudulent federal individual income tax returns for the years 1996, 1997, 1998, 1999, and 2000. Ms. Negrete-Jauregui admitted that income she earned from “The O’Brien Group” was paid to a nominee entity, “CUN-HELL, Inc.,” and was not reported on her income tax returns. She also admitted aiding and abetting the preparation of federal tax returns at the direction of a co-conspirator.

The remaining defendants are awaiting trial. The charges contained in the indictment are only allegations. In the American justice system, a person is presumed innocent unless and until he or she is proven guilty in a court of law.

Assistant Attorney General O’Connor and U.S. Attorney Lam thanked Tax Division Trial Attorneys Charles A. O’Reilly and Blake Stamm, who prosecuted the case. They also thanked the special agents of the Internal Revenue Service, whose assistance was essential to the successful investigation and prosecution of the case.