Alameda Resident Sentenced To Two-And-A-Half Years In Prison And Ordered To Pay Nearly $1.5 Million In Restitution To Victims Of His Ponzi Scheme
OAKLAND – Guadalupe Nieves, Jr. was sentenced today to 42 months in prison and ordered to pay restitution of $444,687 for his role in a false tax refund scheme, announced United States Attorney Melinda Haag and Internal Revenue Service, Criminal Investigation, Special Agent in Charge José M. Martinez.
Nieves, 53, of Hayward, pleaded guilty to wire fraud, in violation of 18 U.S.C. § 1343, on October 16, 2014. According to the plea agreement, Nieves admitted that he had a history of problems with substance abuse. To obtain the funds necessary to support his drug problem, Nieves intentionally devised a scheme to defraud the United States by filing false tax returns claiming tax refund payments for 2010, 2011 and 2012. Nieves obtained personal information from homeless and low income persons to submit fraudulent tax returns and fraudulently obtain tax credits and refunds.
Nieves further admitted using an identification information form, ID-Doc, to obtain detailed personal information of actual persons. Once completed, the ID-Doc gave Nieves access to the names, dates of birth, social security numbers, incomes, number of dependents, expenses and type of work of numerous persons. Nieves convinced people to complete the ID-Doc by telling them they were being screened for eligibility for an Obama Administration-sponsored stimulus program. He told the persons they could qualify for a refund even if they did not work at all during the year. Nieves admitted he intentionally sought out homeless and low-income persons to complete the ID-Doc, recruiting from various drug rehabilitation centers located throughout the San Francisco Bay Area, such as Hayward Fellowship and the East Oakland Recovery Center. Nieves also recruited persons while they were waiting in a food line outside of St. Vincent DePaul Church, located in Oakland. Nieves provided the completed ID-Docs to others for the purpose of preparing and electronically filing false federal individual income tax returns and claiming fraudulent tax credits and refunds.
In addition to improperly obtaining the information of real persons, Nieves also admitted adding false information to the forms. During the time Nieves recruited people for the tax refund scheme, Nieves was a manager at a halfway house, located in San Leandro. The halfway house address was listed as the primary residence address on the false tax returns prepared, even for taxpayers who never had lived there.
In the plea agreement, Nieves also admitted he opened a joint bank account with his partner for the sole purpose of receiving fraudulent tax refunds. Once the refunds were received in the mail or in the bank account, Nieves notified the people for whom the fraudulent forms were submitted and instructed them where to meet with him. He met a number of people in a Starbucks parking lot where he and his partner set up a table to pass out a portion of their fraudulently-obtained refund. Nieves also paid a person, with proceeds from fraudulent tax refunds, to provide security while he and his partner distributed the money in the Starbucks parking lot.
The sentence was handed down by the Honorable Yvonne Gonzalez Rogers, United States District Judge. In addition to the 42-month term of imprisonment, Judge Gonzalez Rogers also sentenced Nieves to a three-year term of supervised release and ordered him to pay a $100 special assessment. Nieves also was ordered to pay restitution in the amount of $444,687. Nieves is in federal custody and has begun serving his sentence.
Assistant U.S. Attorney Thomas Moore is prosecuting the case. The prosecution is the result of an investigation by the Internal Revenue Service, Criminal Investigation.