June 17, 2024 - FRESNO, Calif. — Miguel Martinez, 39, of Bakersfield, pleaded guilty today to conspiring to submit $25 million in fraudulent individual federal income tax returns, U.S. Attorney Phillip A. Talbert announced.

According to court records, from November 2019 through June 2023, Martinez was one of the leaders of a scheme to file hundreds of fraudulent tax returns that claimed millions of dollars in refunds. Martinez and others caused false wage and withholding information for individuals that supposedly worked at fake businesses to be submitted to the Internal Revenue Service. Federal agents determined that the individuals did not work at the businesses, the businesses were fake because the businesses never actually paid any withholdings to the IRS, and the purported owners were unaware of the businesses. Martinez and others then submitted fraudulent tax returns that were in the names of the individuals who supposedly worked at the fake businesses and claimed substantial refunds from the IRS.

As a result of the scheme, the IRS paid out $2.3 million in fraudulent tax refunds. When federal agents arrested Martinez and searched his three homes, he was found with another $750,000 in fraudulent tax refund checks, identification cards for more than 200 individuals, and multiple firearms and ammunition.

This case is the product of an investigation by the IRS Criminal Investigation. Assistant U.S. Attorneys Joseph Barton and Henry Carbajal III are prosecuting the case.

“Mr. Martinez orchestrated an elaborate scheme to steal approximately $25 million by filing hundreds of fraudulent federal income tax returns using fake businesses with false refund claims all while attempting to challenge the integrity of the U.S. tax system,” said IRS Criminal Investigation Oakland Field Office Acting Special Agent in Charge Michael Mosley. “His plea reinforces that IRS Criminal Investigation special agents and investigative staff are up to that challenge and committed to following the money and directing criminals to justice.”

Martinez is scheduled to be sentenced on Sept. 23, 2024. He faces a statutory maximum penalty of 10 years in prison and $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

Martinez’s co-defendant in the case, Victor Cruz, who is a tax preparer in Bakersfield, is pending trial. Cruz is presumed innocent until and unless he is proven guilty beyond a reasonable doubt.
Source: DOJ Release