D O J Seal
U.S. Department of Justice

United States Attorney
Northern District of Texas

1100 Commerce St., 3rd Fl.
Dallas, Texas 75242-1699

 
 

 

Telephone (214) 659-8600
Fax (214) 767-0978

 
FOR IMMEDIATE RELEASE
DALLAS, TEXAS
CONTACT: 214/659-8600
www.usdoj.gov/usao/txn
JUNE 7, 2007
   

DFW TAX PREPARER CHARGED WITH RUNNING
TELEPHONE EXCISE TAX REFUND FRAUD SCHEME

DALLAS — Agents with the Internal Revenue Service (IRS) Criminal Investigation, arrested Herbert Jena, a local tax preparer, yesterday afternoon on charges in an indictment that was returned by a federal grand jury in Dallas earlier this week and unsealed today, announced U.S. Attorney Richard B. Roper of the Northern District of Texas and Eric Martinez, Special Agent in Charge of the Dallas Field Office of IRS Criminal Investigation. Two other defendants charged in the indictment, Aurora Perez and Nancy Munoz, worked with Jena at his tax preparation businesses. Perez surrendered to federal authorities this morning and Munoz is expected to surrender soon to federal authorities. Jena and Perez appeared this afternoon before a U.S. Magistrate Judge in Dallas who released each of them on bond. Jena was also arraigned today and entered a not guilty plea. An arraignment date has not yet been set for Perez.

SAC Martinez said, “The allegations in this indictment are that this scheme in the Dallas/Fort Worth metroplex claimed more than $1.6 million in fraudulent telephone excise tax refunds, making it one of the most egregious telephone excise tax refund fraud schemes during this filing season.” Martinez continued, “This office is committed to “disconnecting” these lawbreakers and will continue to investigate and pursue charges against those who engage in tax fraud.”

According to the indictment, Dallas resident, Herbert Jena, 31, operated two tax preparer businesses, Montfort Tax Services and Jackson Hubbert, both located at 5625 Alpha Road in Dallas. Nancy Munoz, 24, and Aurora Perez, 41, both of Irving, Texas, worked with Jena at Montfort and Jackson Hubbert, preparing, or assisting in the preparation of, tax returns for the 2006 tax year.

According to the indictment, beginning as early as September 20, 2006, and continuing until at least March 1, 2007, the three defendants conspired together to defraud the U.S. by impeding, impairing, obstructing, and defeating the lawful functions of the IRS in ascertaining, computing, assessing and collecting federal income taxes. Using Electronic Filer Identification Numbers (EFINs) that Jena obtained from the IRS, and information obtained from tax payers,
the defendants prepared false federal tax returns using the names of actual tax clients of Montfort and Jackson Hubbert. They manipulated the tax returns by fraudulently including false Telephone Excise Tax Refund (TETR) and Fuel Tax Credit (FTC) claims that were not valid and that they concealed from the taxpayers for whom the returns were prepared.

The indictment explains that the TETR was a one-time credit, available on 2006 federal income tax returns, that was designed to refund previously collected federal excise taxes on long-distance or bundled telephone service paid from February 2003 through August 2006. The FTC was a federal tax reimbursement available to eligible taxpayers arising out of the non-taxable use of fuel during certain qualified business activities.

In falsifying the returns, according to the indictment, the defendants included false requests for refunds or credits from the IRS, resulting in refund and credit overpayments by the IRS and unearned and fraudulent tax preparation fees paid to the defendants. The defendants then electronically filed these fraudulent tax returns with the IRS.

The indictment alleges that between January 12, 2007, and February 20, 2007, the defendants filed, or caused to be filed, approximately 1681 individual income tax returns with the IRS using Jena’s multiple EFINs. Approximately 1200 of those returns contained requests for the TETR in excess of $60, the highest amount of the standard TETR credit. The total amount of TETR claims submitted by the defendants was approximately $1,618,267. Approximately 774 of the returns contained requests for the FTC. The total amount of FTC claims submitted by the defendants was approximately $1,165,758.

According to the indictment, the defendants directed the fraudulently obtained income tax refunds to be deposited into bank accounts that Jena held or controlled.

All three defendants are charged in the indictment with one count of conspiracy to defraud the U.S., in violation of 18 U.S.C. § 371. In addition, Jena is charged with seven counts of aiding and assisting fraud and false statements, in violation of 26 U.S.C. § 7206(2). Munoz is also charged with eight, and Perez with four, counts of the same offense. The conspiracy count carries a maximum statutory sentence of five years in prison and a $250,000 fine, upon conviction. Each aiding and assisting fraud and false statement count carries a maximum statutory sentence of three years in prison and a $250,000 fine, upon conviction.

An indictment is an accusation by a federal grand jury and a defendant is entitled to the presumption of innocence unless proven guilty. If convicted, however, Jena faces a maximum statutory sentence of 22 years in prison, Munoz faces a maximum statutory sentence of 25 years in prison and Perez faces a maximum statutory sentence of 13 years in prison.

U.S. Attorney Roper praised the investigative efforts of the IRS - Criminal Investigation. The case is being prosecuted by Assistant U.S. Attorney Jeffrey Ansley.

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