Ten Tax Preparers and Associates Charged with Stealing Millions Through Tax Refunds

LOS ANGELES –  Ten income tax preparers and associates were charged with fraudulently stealing millions of dollars from the IRS through tax refunds, federal prosecutors said.

Most of those charged and named in three separate federal indictments out of Los Angeles and Riverside counties had been arrested by Thursday morning.

The indictments allege that income tax return preparers and their cohorts filed fraudulent tax returns that used stolen identities, U.S. Attorney’s Office officials said.

“These schemes injure innocent victims, cost United States taxpayers billions of dollars and threaten to undermine the system used by millions of American taxpayers,”  United States Attorney André Birotte Jr.

The defendants named in the 25-count indictment are:

• Nancy L. Hilton, 68, the owner and operator of the two tax businesses, who was taken into custody after surrendering on Tuesday;
• Denise Gray, 53, a return preparer and manager for the Hilton tax preparation business, who surrendered on Tuesday;
• Barbara J. Connor, 56, a return preparer for the Hilton tax preparation business, who surrendered on Tuesday;
• Curtis D. Lowe, 27, who worked with Nancy L. Hilton allegedly to file false returns, who is currently being sought by federal authorities;
• Kawaski D. Morris, 34, who worked with Nancy L. Hilton allegedly to file false returns, and who was arrested Monday evening in Las Vegas;
• Michael J. White, 54, who allegedly filed false returns in his own name, and who will be summoned to appear for an arraignment;
• Staff Voundy II, 51, who allegedly filed false returns in his own name, and who will be summoned to appear for an arraignment; and
• Vincent Voundy, 46, who allegedly filed false returns in his own name, and who will be summoned to appear for an arraignment.

Hilton, Gray, Connor, Lowe and Morris are charged with conspiring to submit false claims against the U.S. government – specifically, tax returns – that claimed inflated amounts of income, dependents and expenses related to self-employment. According to the indictment, in some cases, the tax returns would use an individual’s personal identifying information without their knowledge or consent.

Hilton and her co-conspirators asked the IRS to send the tax refunds by direct deposit or wire transfer to bank accounts they controlled. Hilton, Lowe and Morris also are charged with various counts of making false claims against the United States.

The indictment further charges Hilton and Lowe with identity theft for illegally using the name and social security number of an individual to file fraudulent tax returns. The indictment charges White and the Voundy brothers with submitting false claims against the United States government.

Three others linked to the Hilton scheme pleaded guilty last fall to federal tax fraud violations. Carmen Luera, 52, and her two sons – Alfonso Luera, 30; and Sergio Luera, 28 – all from Nuevo, California, pleaded guilty to federal tax charges.

Authorities said all three Lueras have agreed to never again prepare federal income tax returns for anyone other than themselves and their spouses. The Lueras are scheduled to be sentenced by United States District Judge Dean D. Pregerson later this year.

According to Carmen Luera’s plea agreement, the Hilton tax conspiracy sought nearly $2.9 million in fraudulent tax refunds for just the 2008 tax year. The total amount of refunds paid by the IRS based upon those returns was approximately $1.35 million.