KC Man Indicted in $2.5 Million Tax Fraud Scheme

KANSAS CITY, Mo. – A Kansas City, Mo., man has been indicted for a $2.5 million tax fraud scheme that involved millions of dollars of false income he claimed for himself and his children.

Michael A. Kheop, 51, was charged in a six-count indictment returned under seal by a federal grand jury in Kansas City, Mo. That indictment was unsealed and made public today following Kheop’s arrest.

The federal indictment alleges that Kheop filed false claims for income tax refunds totaling $2,591,706 in his own and his minor children’s names from 2014 through 2018. Kheop allegedly created a fraudulent entity, Al-Aleem Engineering, in February 2013. According to the indictment, Kheop then created false W-2 forms in the name Al-Aleem, containing false income and withholding in order to fraudulently claim refunds in his own name and using his minor children’s names. 

Kheop allegedly filed 12 fraudulent claims for refunds on behalf of his three minor children for tax years 2014 through 2017. Kheop allegedly filed three fraudulent claims for refunds in his own name for tax years 2015 through 2017. For example, the indictment says, Kheop claimed an income of $5 million for 2017 and filed on Jan. 29, 2018, for a refund of $1,562,579. The U.S. Treasury actually paid a total of approximately $24,322 to Kheop.

Kheop is charged with three counts of false claims, two counts of mail fraud and one count of aggravated identity theft.

The charges contained in this indictment is simply an accusation, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.

This case is being prosecuted by Assistant U.S. Attorney Kathleen D. Mahoney. It was investigated by IRS-Criminal Investigation.