Essex County Tax Preparer Admits $4.4 Million Conspiracy to Defraud IRS
For Immediate Release
U.S. Attorney's Office, District of New Jersey
NEWARK, N.J. – An Essex County, New Jersey, tax preparer admitted that he conspired to obtain over $4.4 million by defrauding the IRS, U.S. Attorney Philip R. Sellinger announced today.
Omar Khater, 33, of Fairfield, New Jersey, pleaded guilty before U.S. District Judge Brian R. Martinotti in Newark federal court on Jan. 23, 2024, to an information charging him with one count of conspiracy to commit wire fraud and one count of conspiracy to defraud the IRS. Khater’s conspirator, Walid Khater, 38, of Arizona, is charged by complaint and his case remains pending.
“With this year’s filing just around the corner, today’s plea is a stark reminder as to how valuable your personally identifiable information is to criminals and how important it is to safeguard the information,” Tammy Tomlins, Special Agent in Charge, IRS Criminal Investigation, Newark Field Office, said. “Along with our law enforcement partners, we will vigorously pursue individuals who steal other people’s identities to enrich themselves through the filing of fraudulent tax returns.”
“Khater is now admitting he worked with others to falsely file returns based on stolen identities and pocketed the refunds,” FBI – Newark Special Agent in Charge James E. Dennehy said. “We trust tax preparers with a tremendous amount of vital information about our lives, and when they use it to break the law it's unsettling to say the least. Khater fleeced the IRS out of millions of dollars, but he's the one now paying for his fraud.”
According to documents filed in this case and statements made in court:
Omar and Walid Khater were relatives who worked together and with others to steal victims’ identities, which they used to file false tax returns and fraudulently receive tax refunds from the IRS. They electronically submitted tax documents to the IRS falsely claiming that the individual taxpayers listed on those documents had earned certain income or won thousands – and in some cases millions – of dollars in gambling and lottery winnings. The false filings also claimed tax withholdings on the purported income or gambling winnings that entitled the tax filer to refund payments from the IRS. The Khaters and others typically submitted these fraudulent tax filings using the names and personal identifying information of victims without the victims’ knowledge or permission. The fraudulent filings caused the IRS to pay lucrative tax refunds, which the Khaters and others directed to various bank accounts that they controlled. This scheme caused the U.S. Treasury to issue tax refunds $4.49 million, which the Khaters and others diverted to bank accounts they controlled in New Jersey and elsewhere.
The count of conspiracy to commit wire fraud is punishable by a maximum of 20 years in prison and the count of conspiracy to defraud the IRS is punishable by a maximum of five years in prison is punishable by a maximum of five years in prison. Both counts are also punishable by a fine of $250,000, or twice the gross loss or gain caused by the offense, whichever is greatest. Sentencing is scheduled for June 12, 2024.
U.S. Attorney Sellinger credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Tammy Tomlins in Newark; and special agents of FBI-Newark, under the direction of Special Agent in Charge James E. Dennehy, with the investigation leading to today’s plea.
The government is represented by Assistant U.S. Attorneys Fatime Meka Cano of the Economic Crimes Unit and Katherine M. Romano of the Health Care Fraud Unit in Newark.
The charges and allegations against Walid Khater are merely accusations, and he is presumed innocent unless and until proven guilty.
Updated January 24, 2024
Press Release Number: 24-029