IRS Agents Arrest Former El Paso Businessowner and Three Employees in Connection with an Alleged Fraudulent Tax Return Preparation Scheme
For Immediate Release
U.S. Attorney's Office, Western District of Texas
In El Paso this morning, IRS agents arrested 60–year-old Belia Mendoza, the owner of Mendez Tax Service, and three of her employees in connection with an alleged fraudulent tax return preparation scheme announced Acting United States Attorney Richard Durbin, Jr. and Internal Revenue Service-Criminal Investigation Special Agent in Charge William Cotter.
A 22-count federal grand jury indictment, filed last week and unsealed today, charges Mendoza, 36-year-old Margarita Hernandez, 46-year-old Denise Duchene and 47–year-old Anna Montez with one count of conspiracy to defraud the United States. The indictment also charges the defendants with multiple counts of aiding and assisting in the preparation of a false income tax return.
According to the indictment, from February 2009 until June 2011, Mendoza and the others conspired to prepare and submit to the IRS numerous fraudulent income tax returns for tax years 2008, 2009 and 2010. In order to obtain maximum refunds for their clients using the Earned Income Credit, the defendants would use false or inflated figures for unreimbursed employee business expenses (Schedules A and C), child and dependent care expenses (Form 2441), education credits (Form 8863), and false filing status. Authorities allege the total loss to the Government at as a result of this scheme is estimated to be $90,000.
“While most return preparers provide excellent service to their clients, a few unscrupulous tax preparers file false and fraudulent returns to defraud the government and their own clients. Our special agents use their investigative and financial expertise to identify and hold accountable abusive tax return preparers who knowingly prepare tax returns containing false tax credits and deductions that they are not entitled to receive. Today’s arrests should send a strong signal that we are putting those dishonest tax return preparers on notice that we are watching their activities closely to ensure compliance with the law,” stated Internal Revenue Service-Criminal Investigation Special Agent in Charge William Cotter.
Upon conviction, the defendants face up to five years in federal prison on the conspiracy charge and up to three years in federal prison for each false tax return preparation charge. Assistant United States Attorney Adrian Gallegos is prosecuting this case on behalf of the Government.
An indictment is merely a charge and should not be considered as evidence of guilt. The defendants are presumed innocent until proven guilty in a court of law.
Updated February 4, 2016