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Criminal Corner

Former Tax Preparer Sentenced to Federal Prison

A former tax preparer, who fled the country in 2004 to avoid prosecution, was sentenced to 18 months in federal prison.

Luis A. Morales, formerly of Turlock, pleaded guilty October 15 to one count of mail fraud. According to court documents, Morales was the owner of L & M Tax Service with clients in Fremont, Turlock, and Vallejo. In 2002 through 2003, Morales prepared fraudulent amended returns for his clients falsely showing deductions for medical and dental expenses and gifts to charities that the clients neither incurred nor made. These false returns resulted in fraudulent tax refunds being sent through the United States (U.S.) mail, which constitutes mail fraud.

In 2003, Morales eluded our special agents by fleeing to his native Panama. Morales was arrested in July by U.S. Customs in Florida as he attempted to enter the country. Morales was then extradited to California for prosecution.

Morales’ scheme resulted in more than 50 fraudulent refunds totaling $116,000 and total refunds attempted exceeding $177,000. Our Fraud Unit identified the scheme when an analysis of returns prepared by Morales showed identical deduction amounts on numerous amended returns. We recovered the entire $116,000 from the taxpayers.

United States District Judge Frank C. Damrell, Jr. handed down the sentence in Courtroom 2 of the Sacramento Federal Courthouse. Assistant United States Attorney Samantha S. Spangler prosecuted the case.

Back to December 2010 Tax News