Masood Chotani, a Los Angeles County former CPA and tax return preparer who spent the last three years as a fugitive in Pakistan, was arraigned July 12 on charges that he conspired to defraud the United States and made false claims for income tax refunds, the IRS announced.
A federal grand jury in Riverside County, California, returned an indictment against Chotani on June 23, 2010. The indictment was unsealed earlier this year.
The indictment alleges that in 2002 and 2003, Chotani, Ather Ali of Diamond Bar, and Haroon Amin of Upland, conspired to file at least 250 false income tax returns with the IRS using names and Social Security numbers of deceased individuals, claiming more than $2,000,000 in tax refunds.
Social Security Fraud
Steven Miller, the IRS deputy commissioner for services and enforcement, told USA Today that Social Security fraud is a growing problem. "The IRS last year stopped more than 260,000 fraudulent tax returns involving confirmed cases of identity theft, preventing an estimated $1.4 billion in refunds from reaching suspected criminals," said Miller.
The article went on to say, "Those totals represent a jump from 2010, when the IRS said it stopped 48,966 returns for confirmed identity theft and halted $247 million in related tax refunds."
"Let me be clear that we will continue to pursue the criminals who would steal from the American taxpayer," Miller said.
The indictment further alleges that many of the illegally obtained refund checks were deposited into bank accounts within the Islamic Republic of Pakistan and the Republic of Armenia.
According to court documents, most offenses occurred in San Bernardino, Los Angeles, Orange, Riverside, and Ventura counties.
Chotani is also charged with personally preparing and filing two false claims for refund on federal income tax returns.
Trial is scheduled for September 4, 2012. If convicted, Chotani faces a maximum potential penalty of five years' imprisonment and a $250,000 fine for each count of conspiracy and presenting false claims.
Source: U.S. Department of Justice