Two Orange County Tax Preparers Charged in Long-Running Tax and Benefit Fraud Scheme Orchestrated by Corrupt Social Worker
SANTA ANA, California – Two Orange County tax preparers were arraigned today on federal charges alleging they participated in a scheme orchestrated by a corrupt social worker who stole his clients’ identities to fraudulently obtain tax refunds, welfare benefits and credit cards.
Anton Nguyen, 53, of Fountain Valley, and Rosemary Pham, 64, of Midway City, were summonsed to appear in United States District Court in Santa Ana, where this morning they pleaded not guilty to the criminal charges against them. A July 26 trial date has been scheduled for both defendants, who remain out of custody.
Nguyen and Pham were charged in separate indictments filed on May 11 with conspiracy to defraud the United States. Nguyen also is charged with three counts of making false claims against the United States for the payment of federal income tax refunds, and Pham additionally is charged with 10 counts of aiding and advising the filing of false tax returns.
Nguyen and Pham allegedly conspired with John Tran, who is believed to be either 56 or 60, of Fountain Valley, an Orange County Social Services Agency case worker from July 1994 to October 2018, who stole the Social Security numbers and other personal identifying information (PII) from his clients – many of them recent immigrants.
From August 2010 to June 2019, Tran and his co-conspirators used the stolen information to fraudulently obtain money from the federal government, the State of California, the County of Orange and financial institutions.
Nguyen, who owned and operated the Westminster-based Century Travel & Tax, and Pham, the owner and operator of Victory Tax Service in Westminster, allegedly used the stolen identities that Tran provided to create fraudulent Forms 1099-MISC purporting to show payments made to the identity theft victims by companies, including those controlled by Tran and other co-conspirators.
The defendants allegedly prepared and filed federal income tax returns using the Tran-provided stolen identities. Nguyen and Pham used the purported payments on the fraudulent Forms 1099 as income to the identify theft victims, making them appear to qualify for tax credits, including the Earned Income Tax Credit and the Child Tax Credit.
In turn, the reported payments to the identity theft victims were used by Nguyen’s and Pham’s clients to offset business revenues and reduce the taxes they owed by making it appear that the identity theft victims worked for them, according to the indictments. In exchange for the fabrication of the Forms 1099, Nguyen’s and Pham’s clients allegedly paid them a fee.
Tran and his co-conspirators filed 433 tax returns using PII belonging to other individuals, generating at least $973,153 in fraudulently obtained tax refund payments from the United States. Pham and Nguyen allegedly caused at least $1,378,092 and $4,054,802, respectively, in unpaid taxes to be incurred.
Pham also allegedly reported fraudulent Fuel Tax Credits for other taxpayers.
Indictments contain allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
If convicted of all charges, Nguyen would face a statutory maximum sentence of 10 years in federal prison and Pham would face a statutory maximum sentence of eight years in federal prison.
Prior to these indictments, federal prosecutors secured seven guilty pleas to criminal charges connected to this scheme.
Tran pleaded guilty in November 2019 to conspiracy to defraud the United States with respect to claims, mail fraud and aggravated identity theft. Tran is scheduled to be sentenced on July 25, at which time he will face a statutory maximum sentence of 72 years in federal prison and a mandatory minimum sentence of two years in federal prison.
Chau Nguyen, 68, of Garden Grove; Sophie Thuy Nguyen, 47, of Westminster; Kevin Le, 56, of Anaheim Hills; Van Quach, 42, of Monterey Park; and Peter Duc Nguyen, 62, of Garden Grove, each have pleaded guilty to evasion of assessment of taxes and are scheduled to be sentenced later this year, at which time they will each face a statutory maximum sentence of five years in federal prison.
Thomas Nguyen, 61, of Santa Ana, pleaded guilty in June 2021 to one count of tax evasion. He was fined $30,000 and ordered to pay $133,796 in restitution.
IRS Criminal Investigation, with assistance from the Orange County District Attorney’s Office, investigated this matter.
Assistant United States Attorneys Bradley E. Marrett and Daniel H. Ahn of the Santa Ana Branch Office are prosecuting these cases.