Twenty Four Charged With Conspiracy To Claim More Than $2.3 Million In False Federal Tax Refunds

Twenty three new defendants are facing federal charges, along with a man who was arrested in April, alleging that they participated in a conspiracy since 2008 to claim more than $2.35 million in fraudulent federal income tax refunds and economic stimulus payments. All two dozen defendants allegedly shared the proceeds of Internal Revenue Service tax refunds, totaling more than $1.3 million, by withdrawing the tax funds deposited into co-defendants’ bank accounts, knowing that they were not entitled to the fraudulently obtained refunds. 

Each of the 24 defendants was charged with one count of conspiracy to steal federal funds and defraud the IRS and one or more counts each of theft of government funds in one of two separate federal grand jury indictments that were unsealed after six of the defendants were arrested earlier this week.
 
The indictments followed the April arrest of Ovidiu Isac, who allegedly directed the conspiracy. Isac and other defendants allegedly recruited co-conspirators to open bank accounts, withdraw the deposited tax refunds and stimulus payments, and share the proceeds.
 
According to the indictments, individual tax returns contained the names of Romanian nationals, including Romanian citizens who had traveled to the United States on J-1 exchange visitor visas. The returns included false W-2s showing employment income and false deductions, resulting in fraudulent claims for tax refunds. The indictments allege that for the tax years 2007, 2008 and 2009, more than 440 fraudulent tax returns were filed, directing the IRS to electronically deposit the refunds in bank accounts, primarily in the Chicago area.
 
Some of the defendants allegedly recruited individuals who agreed to open bank accounts, or use their existing bank accounts, to receive tax refunds and economic stimulus payments. When Ovidiu Isac or another recruiter notified the account holder that a refund had been deposited, the account holders typically withdrew the money, shared it with the recruiter, and kept some for themselves, according to the government.
 
The conspiracy count carries a maximum penalty of five years in prison and a $250,000 fine, and each count of theft of government funds carries a maximum sentence of 10 years in prison and a $250,000 fine. In addition, restitution is mandatory to the United States for the amount of tax refunds and stimulus payments fraudulently obtained. If convicted, the court is required to impose a reasonable sentence under the advisory United States Sentencing Guidelines.