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wilmington tax preparer sentenced to 57 months for making false statements to irs and the north carolina banking commission

February 4, 2014

RALEIGH – United States Attorney Thomas G. Walker announced that today in federal court, Senior United States District Judge W. Earl Britt sentenced Eugenio M. David-Martinez , age 55, of Wilmington, North Carolina, to 57 months imprisonment, followed by 3 years of supervised release.

David-martinez was named in a two-count Criminal Information filed on April 22, 2013, charging him with Making False Statements to a Federal Agency and Making False Claims of US Citizenship.  On July 11, 2013, david-martinez pled guilty to those charges. 

According to the investigation, DAVID-MARTINEZ came to the United States from Cuba in 1980.  Since then, he has illegally resided in the United States.  As a Cuban national, however, he is not deportable. 

Since at least January 2007, DAIVD-MARTINEZ has provided tax and accounting services, in Wilmington, North Carolina.  The majority of his clients were also residing in the United States illegally.  In order to file income tax returns, DAVID-MARTINEZ’s clients required Individual Taxpayer Identification Numbers, otherwise referred to as ITINs.  To obtain an ITIN, the applicant must submit proof of identification and a tax reason for filing a return, which includes earning wages in the United States.  The IRS authorizes individuals, known as acceptance agents, to assist applicants in the ITIN process.  To become an acceptance agent, the individual must prove that he is a citizen or a legal resident and pass a suitability background check.  In his applications to become an acceptance agent, DAVID-MARTINEZ falsely stated that he was a US citizen and bypassed the suitability background check by falsely representing he had previously been authorized to practice before the IRS as an Enrolled Agent.    

For the years 2007 through 2012, DAVID-MARTINEZ filed approximately 18,536 ITIN applications for which he received $15 per application.  He also filed approximately 12,985 income tax returns for individuals with ITINs for which he charged on average $90 per return. 

DAVID-MARTINEZ also negotiated the IRS refund checks issued to the ITIN taxpayers.  To advertise or offer this check cashing service for a fee, DAVID-MARTINEZ required a check cashing license issued by the North Carolina Office of the Commissioner of Banks.  The application required DAVID-MARTINEZ to indicate his country of citizenship.  DAVID-MARTINEZ falsely claimed he was a US citizen. 

An integral part of the IRS-Criminal Investigation's mission involves detecting and catching fraudulent tax refund claims,” stated Jeannine A. Hammett, Internal Revenue Service-Criminal Investigation Special Agent in Charge. “The IRS-Criminal Investigation will continue to aggressively pursue those who file false tax returns to claim tax refunds for which they are not entitled.”

The Investigation of this case was conducted by the IRS-Criminal Investigation and the US Department of Homeland Security.  Assistant United States Attorney Susan Menzer represented the government.

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