Florida Man Sentenced to Prison for Promoting Nationwide Tax Fraud Scheme
Caused $14.6 Million in Fraudulent Tax Refund Claims to be Filed with IRS
A Florida man was sentenced to 51 months in prison today for his role in a nationwide tax fraud scheme that involved more than 200 participants in at least 19 states.
According to court documents and statements made in court, Aaron Aqueron, of Clermont, recruited clients to the fraud scheme by convincing them that their mortgages and other debts entitled them to tax refunds. Aqueron collected tax and financial information from the clients to send to co-conspirators, who prepared tax returns and other tax documents to submit to the IRS. These tax returns falsely claimed that banks and other financial institutions had withheld large amounts of income tax from the participants, thereby entitling the clients to a refund. In reality, the financial institutions had not paid any income to, or withheld any taxes from, these individuals. In total, the tax returns filed by Aqueron’s clients sought more than $14.6 million in tax refunds and caused the IRS to actually pay out more than $7.6 million.
As part of his plea, Aqueron admitted he and his co-conspirators received fees from his clients ranging from $10,000 to $15,000 each. Aqueron further admitted he did not report on his 2015 individual tax return the income he received from the scheme. Aqueron also personally filed false tax returns for other years on which he fraudulently claimed that he was entitled to tax refunds. In response to one of these false tax returns, the IRS issued Aqueron a refund of $193,347.97.
Aqueron further admitted that, pursuant to the fraud scheme, he attempted to obstruct the IRS’s efforts to collect the tax refunds it issued to his clients. Aqueron and his co-conspirators coached clients on ways to obstruct IRS collection efforts. For example, after learning one client had begun to receive letters from the IRS about collections, Aqueron instructed the client: “Make sure you move money out of your name and out of the banking institutions and be smart.” Aqueron also attempted to obstruct IRS efforts to collect his own fraudulently-obtained refund, including by transferring money into a trust.
Last month, the main promoter of the fraud scheme, Iran Backstrom, was sentenced to more than eight years in prison. Backstrom’s second-in-command, Mehef Bey, was sentenced to 11 years in prison.
In addition to the term of imprisonment, the district judge also ordered Aqueron to serve three years of supervised release and pay approximately $5.9 million in restitution to the IRS.
Acting Deputy Assistant Attorney General Stuart M. Goldberg and U.S. Attorney Roger B. Handberg for the Middle District of Florida made the announcement.
IRS-Criminal Investigation is investigating the case.
“The sentencing handed down today demonstrates the key role Aqueron played in this sophisticated scheme to swindle the government,” said IRS-Criminal Investigation Special Agent in Charge Brian Payne. “Financial fraud of this magnitude and with this degree of trickery, deceit, and dishonesty, deserves to be punished. The IRS and Department of Justice remain determined and vigilant in investigating and prosecuting such schemes to the fullest extent of the law.”
Trial Attorneys Melissa S. Siskind, Kavitha Bondada and Isaiah Boyd III of the Tax Division, and Assistant U.S. Attorney Chauncey A. Bratt for the Middle District of Florida are prosecuting the case.