News and Press Releases

Santa Clara Business Owners Pleaded Guilty To Tax And Bank Fraud

FOR IMMEDIATE RELEASE
August 22, 2014

SAN JOSE – Elena Moreno pleaded guilty on Aug. 20, 2014, to one count of conspiracy to defraud the United States by impeding and impairing the IRS, and one count of conspiracy to commit wire fraud and bank fraud, United States Attorney Melinda Haag and Deputy Assistant Attorney General Ronald Cimino of the Justice Department's Tax Division announced.

Arturo Moreno and Fidencio Moreno, co-conspirators pleaded, guilty on July 30, 2014. Arturo Moreno pleaded guilty to one count of conspiracy to defraud the United States by impeding and impairing the IRS, and one count of conspiracy to commit wire fraud and bank fraud. Fidencio Moreno pleaded guilty to one count of conspiracy to defraud the United States by impeding and impairing the IRS.

According to court documents, beginning in 2005 and continuing through at least 2010, Arturo Moreno, Elena Moreno, and Fidencio Moreno conspired to defraud the United States by failing to report all of the gross receipts from their charter bus company, Quality Assurance Travel (QAT), on the corporate tax returns for QAT and their personal income tax returns that they filed with the IRS. The total amount of unreported gross receipts during those years exceeded $966,908. Arturo Moreno and Fidencio Moreno were each fifty percent owners of QAT. The unreported income consisted primarily of cash receipts that were paid by passengers as they boarded the bus, then not deposited into the business bank accounts or tracked in the records given to the Morenos' return preparer. Prior to pleading guilty, the Morenos paid restitution to the IRS for the taxes owed on this unreported income.

Fidencio Moreno, 52, Elena Moreno, 40, and Arturo Moreno, 37, San Jose residents, also conspired to commit bank fraud and wire fraud between 2005 and July 2013 by submitting false and fraudulent loan applications that overstated the applicants' income and assets. In total, the defendants fraudulently obtained more than $3.3 million in loans through their conspiracy. Some applications also misrepresented the intended use of the property as a primary residence. This scheme allowed the defendants to purchase and/or refinance various pieces of property located in and around San Jose, Calif. After the defendants fell behind with the loan payments, they attempted to avoid foreclosure by submitting false and fraudulent applications to modify these loans. One of the four properties was ultimately sold via a short sale, while another was foreclosed upon.

The defendants were originally indicted on Oct. 18, 2012. All of the defendants were charged with 1 count of conspiracy to defraud the United States, in violation of 18 U.S.C. 371. Fidencio Moreno and Elena Moreno were charged with 4 counts of filing false tax returns for tax years 2006 through 2009, in violation of 26 U.S.C. 7206(1). Arturo Moreno was charged with 4 counts of filing false tax returns for tax years 2006 through 2009. A federal grand jury returned a superseding indictment against all of the defendants on Jan. 9, 2014. The superseding indictment charged all defendants with 1 count of conspiracy to defraud the United States, in violation of 18 U.S.C. 371, and 1 count of conspiracy to commit wire fraud and bank fraud, in violation of 18 U.S.C. 1349. Arturo Moreno was also charged with 6 counts of filing false tax returns, in violation of 26 U.S.C. 7206(1). Fidencio Moreno was charged with 5 counts of filing false tax returns and 6 counts of making false statements to a financial institution, in violation of 18 USC 1014. Elena Moreno was charged with 4 counts of filing false tax returns and 3 counts of making false statements to a financial institution. The superseding indictment also included a forfeiture allegation that sought a money judgment against all defendants of $3.3 million, as well as the forfeiture of four different properties in San Jose, Calif.

Conspiracy to defraud the United States is punishable with up to 5 years imprisonment and a $250,000 fine. Each count of filing a false tax return is punishable with up to 3 years imprisonment and a $250,000 fine. Conspiracy to commit wire fraud and bank fraud is punishable with up to 30 years imprisonment, and a $1 million fine. The defendants face a maximum sentence of 5 years imprisonment and a fine of $250,000 for conspiring to defraud the United States and a maximum term of imprisonment of 30 years and a fine of $1,000,000 for conspiracy to commit bank fraud and wire fraud. They could also be ordered to pay restitution to any financial institutions that they defrauded.

Trial Attorneys Katherine L. Wong and Todd P. Kostyshak of the Justice Department's Tax Division and Assistant U.S. Attorney Thomas Moore are prosecuting the case, with the assistance of Saundra Burgess. This case was investigated by IRS-Criminal Investigation.

(Moreno superseding information )

(Moreno et al superseding indictment )

 

 

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