A California tax preparer, Victor Cruz, has pleaded guilty to aiding an illegal immigrant, Miguel Martinez, in a $25 million tax fraud scheme. The scheme involved stolen identities and fake businesses, resulting in $2.3 million in fraudulent refunds. Cruz is facing up to 10 years in prison and a $250,000 fine, while Martinez received a six-year sentence.
According to prosecutors, Martinez used stolen identities to create fake businesses and then reported phony wage and withholding information to the IRS. He then submitted hundreds of income tax returns using these stolen identities, claiming that the individuals worked for the fake businesses and were owed tax refunds based on the false information. Cruz, the tax preparer, prepared and filed more than 500 of these fraudulent tax returns in exchange for thousands of dollars in fees from Martinez.
The IRS paid out $2.3 million of the $25 million in refunds claimed in the scheme. Martinez has already pleaded guilty and was sentenced to six years in prison, while Cruz is scheduled to be sentenced on November 17, 2025. The case highlights the growing issue of identity theft and financial fraud in the United States, particularly involving individuals who are in the country illegally.