San Francisco Man Pleads Guilty To Tax Fraud Scheme
Recruited Individuals from Drug Rehabilitation Centers in Hayward and East Oakland
OAKLAND – Juancho Tango Andres pleaded guilty in federal court today for his role in a false tax refund scheme, announced United States Attorney Melinda Haag and Internal Revenue Service, Criminal Investigation, Acting Special Agent in Charge Andrew Toth.
In pleading guilty, Andres admitted that he had a history of problems with substance abuse. To obtain the funds necessary to support his drug problem, Andres intentionally devised a scheme to defraud the United States by filing false tax returns claiming tax refund payments for 2010, 2011 and 2012.
Andres used an identification information form, ID-Doc, created by Sean Cowgill, to obtain the means of identification of actual persons. The ID-Doc required the person’s name, date of birth, and Social Security number. The ID-Doc also sought their income, number of dependents, expenses, and type of work. Andres trained and used recruiters to convince people to complete the ID-Doc by telling them they were being screened for eligibility for a President Obama sponsored stimulus program. Andres explained to his victims that they could qualify for a refund even if they did not work at all during the year.
Andres intentionally sought out homeless and low-income people 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 Recover Center. Andres also recruited people while they were waiting in a food line outside of St. Vincent DePaul Church, located in Oakland. During the time Andres recruited people for the tax refund scheme, Guadalupe Nieves and Andres were house managers at a halfway house, located in San Leandro. Nieves and Andres recruited members of the halfway house to participate in the tax refund scheme. Andres listed the address of the halfway house as the primary residence address on the false tax returns he prepared, even if purported filer had never lived there.
Andres also opened up a joint Wells Fargo bank account with Nieves for the sole purpose of receiving fraudulent tax refunds. Once the refunds were received in the mail or in the bank account, Andres instructed the people in whose names he filed false tax returns to meet with him so he could provide them with a portion of their fraudulent refund. He met a number of people in the parking lot of a coffee shop located in San Leandro. Andres and Nieves set up a table in the parking lot and passed out money to the people he arranged to meet. Nieves paid an individual with fraudulent tax refund proceeds to provide security while they distributed the money in the coffee shop Starbucks parking lot.
Sean Cowgill provided Andres and Nieves with the blueprint for operating the false tax refund scheme. In return, Andres and Nieves paid Cowgill a $50 “franchise fee” for each fraudulent tax refund.
Andres, 47, of San Francisco, was indicted by a federal Grand Jury on July 23, 2013. He was charged with one count of wire fraud in violation of 18 U.S.C. § 1343 and one count of aggravated identity theft in violation of 18 U.S.C. § 1028A(a)(1) and (c)(5). According to the plea agreement, Andres pleaded guilty to wire fraud. As part of the plea agreement, Andres has agreed to pay restitution in the amount of $444,687.
Andres is scheduled to be sentenced on April 2, 2015 at 3:00 pm before the Honorable Yvonne Gonzalez Rogers, United States District Court Judge, in Oakland. The maximum statutory penalty for each count of wire fraud in violation of 18 U.S.C. § 1343 is 20 years in prison and a fine of $250,000 or twice the gross gain or loss, which is greater. However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Thomas Moore is the Assistant U.S. Attorney who is prosecuting the case. The prosecution is the result of an investigation by the IRS, Criminal Investigation.