Both Robeldo and Morales pled guilty in June of last year after the government, in open court, informed United States District Judge Melinda Harmon that if the case were to proceed to trial, the government could prove the following facts beyond a reasonable doubt.

Robledo was the owner of D.J. Income Tax Service where the false tax returns were prepared. Morales was the owner of Eye Deal Optical, located, at the time, in the Fiesta supermarket at 12201 East Freeway, Houston, Texas. Morales' primary role in the conspiracy was to refer individuals to Robledo for income tax preparation in return for a fee. Morales also recruited others to refer taxpayers through her to Robledo and offered to pay them $200.00 per referral.

Robledo used various methods to fraudulently increase a taxpayer's refund including adding fictitious deductions, reporting inflated income and tax withholding amounts, and creating false W-2s for jobs the taxpayer did not hold. The taxpayers did not see or sign the false returns before they were filed; and Robledo, or someone at her direction, signed the taxpayer's name to the return.

Morales was aware that Robledo was preparing false returns designed to fraudulently increase the amount of the refunds and lied when questioned by people she referred as to why their refund was much larger than in past years. Morales was aware the people she brought to Robledo should not have been filing for a refund because they were undocumented aliens who had been paid in cash and had not had tax withheld. Morales lied when questioned about why their refunds were much larger than in the past. Morales told them several falsehoods including that the government had extra money that year; you get extra money for filing early; and, you get more money if you had a baby in 1998.

Many of the false returns were filed electronically by Robledo and involved the use of refund anticipation loans or RALs. RALs are commonly known as rapid refunds. Robledo filed the returns and a bank issued a refund check through Robledo to the taxpayer. This procedure allowed Robledo to control the refund and to take her fee off the top. The facts presented to the court proved that the taxpayers thought Robledo's fee was $69.00 when, in fact, she was taking hundreds of dollars from the refunds without the taxpayers' knowledge.

Morales allowed Robledo to use her business address at the Fiesta as well as the address of her rent house on North Main as the taxpayer's address on some of the false tax returns so they could again control the refund check. Morales deposited some of the fraudulently obtained refund checks into her business bank account and then paid the taxpayer and Robledo their share. Morales accompanied some of her referrals to cash their refund check in order to collect her fee.

In one such instance, Morales referred her baby sitter to Robledo. Robledo prepared a false return for the baby sitter adding a fake W-2 allegedly issued by a company as an employer of the baby sitter. The baby sitter had never been employed at that company. Robledo used Morales' Fiesta store address on the return. Robledo and Morales agreed that the phony income and tax withholding reported on the false W-2 resulted in a fraudulent refund of $3,003.00. Morales took the baby sitter to cash the refund check and collected a fee of $1,000.00, which she told the baby sitter was for Robledo.