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Justice News

Department of Justice
U.S. Attorney’s Office
Southern District of California

FOR IMMEDIATE RELEASE
Friday, March 18, 2016

Local Tax Preparer Sentenced to Seven Years in Prison For Filing Thousands of False Tax Returns and Stealing Identities in Multi-Million Dollar Scam

Assistant U.S. Attorneys Joseph J.M. Orabona (619) 546-7951 or Alexandra Foster (619) 546-6735

NEWS RELEASE SUMMARY March 18, 2016

SAN DIEGO – The owner of a tax preparation business in San Diego County was sentenced in federal court today to seven years in prison, admitting that she filed more than 3,500 false income tax returns with the Internal Revenue Service, that she committed tax evasion, and that she stole the identities of minors and other persons in order to obtain more than $7 million in bogus refunds.

Melissa Ann Vega, also known as Lisa Vega, was a local tax preparer and owner of L&T Works, a tax return preparation business on Miramar Road.  She was sentenced on charges of conspiracy to file false, fictitious, and fraudulent claims for federal tax refunds, tax evasion and aggravated identity theft before U.S. District Court Judge Jeffrey T. Miller.

As detailed in her plea agreement, Vega conspired with others from at least December 2009 through April 2015 to submit thousands of false income tax returns to the IRS in order to fraudulently obtain tax refunds to which Vega, her co-conspirators and her clients were not entitled.  In carrying out her scheme, Vega falsified her clients’ tax returns without their knowledge or consent.  As part of the conspiracy, Vega claimed thousands of dollars in false education expenses and tax credits for which her clients were not qualified.

Vega told her co-conspirators and employees that they should maximize clients’ refunds by filing for a $4,000 education credit, even though the clients did not attend school for that tax year. To conceal her role in the fraud, Vega intentionally omitted her name and tax return preparer identification number on the false tax returns she prepared for her clients. In total, Vega’s fraud caused the IRS to pay more than $7 million in artificially-inflated tax refunds based solely on the false education credits. Moreover, Vega admitted that she and her co-conspirators stole the identities of other persons, including minors, and used them on the false tax returns in order to further inflate the amount of the tax refund paid by the IRS.  

Vega did not shy away from personally profiting from her fraudulent scheme.  In addition to charging her clients between $150 and $200 per return, Vega also admitted that she stole more than $300,000 in false tax refunds from her clients by directing their refunds into bank accounts that she controlled.  Vega also admitted that she evaded her own income taxes and filed false personal tax returns in which she fraudulently claimed withholding credits, education credits, and tax credits for minor dependents that she did not support and who were not related to her. According to court documents, Vega evaded more than $156,000 in taxes due to the IRS for tax years 2009 through 2013.

Vega was arrested on gun charges on December 16, 2014.  On January 28, 2015, she was released on bond and ordered not to commit any federal crimes --specifically filing false tax returns-- while out in the community. Nonetheless, Vega once again began filing false tax returns with the IRS within days of her release. Without the clients’ knowledge, Vega again fraudulently inflated or created credits and deductions to maximize her clients’ false returns. In an attempt to cover up her criminal activity, Vega agreed with Deanna Dave (charged in Criminal Case No. 15CR2715-JM) that Dave was the owner and paid-return preparer for the tax returns filed in February 2015. In truth, Vega continued as the owner of her tax preparation business and prepared the false tax returns, which she filed for her clients. The IRS uncovered her fraud, and Vega was again arrested on February 25, 2015.  Dave pled guilty to providing false statements to the grand jury and is set for sentencing on April 1, 2016, before Judge Miller.

In addition to sentencing Vega, a previously convicted felon, to 7 years in prison, the Court also ordered the forfeiture of several firearms seized from Vega’s residence during the execution of a search warrant in April 2014, including a sawed-off shotgun, shotgun shells, a 9mm handgun, and 9mm ammunition. Vega’s husband, Jamie Lang, was sentenced to 30 months for possessing the unregistered sawed-off shotgun.  The Court ordered Vega to pay restitution to the IRS in the total amount of $7,176,836. 

Furthermore, as part of her plea agreement, Vega agreed to be permanently enjoined from ever preparing or filing federal income tax returns for anyone other than herself.  A permanent injunction will be entered by the IRS to prevent Vega from acting as a tax preparer in the future.   

“Tax fraud results in an increasing burden on honest taxpayers and negatively impacts honest citizens’ confidence in our tax system,” said U.S. Attorney Laura Duffy. “Identity theft not only has a long-lasting financial impact on the victims, but also has an emotional impact affecting the stability of victims and their families. Today’s seven-year sentence for Ms. Vega sends a message to tax preparers and others who engage in refund schemes and identity theft that the government will prosecute you to the fullest extent of the law and that the punishment will be severe.”  With the current tax return filing season underway, U.S. Attorney Duffy reminded the public to always review a copy of any tax return prepared and filed on their behalf and to be skeptical of tax preparers that offer to obtain substantial tax refunds.

“Over the span of six years, Ms. Vega operated a massive tax refund and identity theft scheme, often using the identities of children to falsify deductions,” stated Acting Special Agent in Charge Anthony J. Orlando, IRS Criminal Investigation.  “As today’s sentence shows, the government will hold accountable those who use deceit and fraud to line their pockets with money, especially when that money represents stolen federal tax refunds.”

“Today’s sentencing is a direct result of the efforts of dedicated investigators and prosecutors, and is a reminder that the U.S. Secret Service will vigorously investigate identity thieves who use the personal information of unsuspecting victims,” stated Special Agent In Charge David Murray, U.S. Secret Service.

Separately, three more defendants have entered guilty pleas admitting their roles in the tax fraud conspiracy.  Earlier this year, co-conspirators Tammie Cowles, Stephen Elliott, and Justin Vega entered guilty pleas to conspiracy to file false claims for tax refunds. Co-conspirators Justin Vega and Stephen Elliott are scheduled to be sentenced before U.S. District Judge Jeffrey T. Miller on April 15, 2016, and co-conspirators Tammie Cowles is scheduled for sentencing before Judge Miller on May 6, 2016. 

The public is reminded that tax-related identity theft occurs when someone uses your stolen Social Security number (or the SSN of a dependent) to file a tax return claiming a fraudulent refund.  If your SSN is compromised and you know or suspect you are a victim of tax-related identity theft, the IRS recommends these additional steps:

•           Respond immediately to any IRS notice; call the number provided.

•           Complete IRS Form 14039, Identity Theft Affidavit, if your e-filed return is rejected because of a duplicate filing under your SSN. Attach the completed form to your return and mail according to instructions.

•           Continue to pay your taxes and file your tax return, even if you must do so by paper.

•           If you previously contacted the IRS and did not have a resolution, you may contact them for specialized assistance at 1-800-908-4490.

Link:  The link to IRS Form 14039 = https://www.irs.gov/pub/irs-pdf/f14039.pdf

DEFENDANT                                  Criminal Case No. 14CR3658-JM

Melissa Ann Vega                   Age: 44           San Diego, CA           

SUMMARY OF CHARGES THAT DEFENDANT VEGA PLEADED GUILTY TO:

Count 1 – Title 18, United States Code, Section 286 B Conspiracy to File False Claims

Maximum penalties: 10 years in prison, $250,000 fine, 3 years of supervised release.

Count 2 – Title 26, United States Code, Section 7201 – Tax Evasion

Maximum penalties: 5 years in prison, $250,000 fine, 1 year of supervised release.

Count 3 – Title 18, United States Code, Section 1028A – Aggravated Identity Theft

Maximum penalties: 2 years in prison to be served consecutive to any other term of imprisonment, $250,000 fine, 3 years of supervised release.

OTHER CO-CONSPIRATORS AND CHARGES:

Tammie Cowles                      Age: 41           San Diego, CA            Criminal Case No. 15CR1591-JM

  Pleaded Guilty to:          Title 18, United States Code, Section 286 – Conspiracy to File False Claims

Stephen Elliott                        Age: 28           San Diego, CA            Criminal Case No. 15CR1003-JM

  Pleaded Guilty to:          Title 18, United States Code, Section 286 – Conspiracy to File False Claims

Justin Vega                             Age: 26           San Diego, CA            Criminal Case No. 15CR2198-JM

  Pleaded Guilty to:          Title 18, United States Code, Section 286 – Conspiracy to File False Claims

Deanna Dave                          Age: 49           San Diego, CA            Criminal Case No. 15CR2715-JM

  Pleaded Guilty to:          Title 18, United States Code, Section 1623 – False Declaration before Grand Jury

 Jamie Lang                              Age: 27           San Diego, CA            Criminal Case No. 14CR3658-JM

  Pleaded Guilty to:          Title 26, United States Code, Section 5861(d) – Possession of Saw-Off Shotgun

  Sentenced to:            30 months in prison, 3 years of supervised release, forfeiture of firearms

INVESTIGATING AGENCIES

Internal Revenue Service-Criminal Investigation

United States Secret Service

Bureau of Alcohol, Tobacco, and Firearms

Topic(s): 
Tax
Press Release Number: 
CAS16-0318-Vega
Updated March 18, 2016