Former Fugitive CPA Pleads Guilty in Identity Theft Tax Case
A former CPA and tax preparer who spent three years on the run as a fugitive in Pakistan has pleaded guilty to charges of engaging in a tax refund conspiracy after he was accused of using the names and Social Security numbers of dead people to submit false claims for income tax refunds.
Masood Chotani, a CPA and tax preparer, pleaded guilty to charges that he conspired to defraud the United States before Judge S. James Otero on Tuesday in Los Angeles.
Masood Chotani was indicted in June 2010 by a federal grand jury in Riverside, Calif., on charges of engaging in a scheme to file false tax returns with the Internal Revenue Service using the names and Social Security numbers of deceased individuals (see Fugitive Ex-CPA Arraigned on Tax Charges).
Chotani allegedly misappropriated employer identification information from his client files in 2002 and 2003 and provided the information to Haroon Amin of Upland, Calif. Amin and another co conspirator, Ather Ali, of Diamond Bar, used the stolen employer data, as well as deceased people’ s Social Security numbers and other identification information obtained from the Internet, to prepare and file fraudulent returns.
These returns had fictitious Form W-2 wage and tax statements as attachments, falsely stating that the deceased people earned wages from those employers from which income tax had been withheld. Chotani admitted that he was a knowing participant in this scheme. He also admitted filing similar false returns himself, in his parents’ names, also using employer identification information misappropriated from his files.
The scheme allegedly resulted in the filing of at least 250 false income tax returns with the IRS, claiming an aggregate of more than $2,000,000 in tax refunds. Although the IRS rejected the bulk of these refund claims, a number of refund checks were issued and delivered to addresses controlled by Amin, Ali, and their co-conspirators. According to court documents, most offenses occurred in San Bernardino, Los Angeles, Orange, Riverside, and Ventura counties. Most of these refund checks were delivered overseas to be deposited in bank accounts in Armenia and Pakistan.
Haroon Amin pleaded guilty to conspiracy to defraud the United States on Jan. 25, 2010 and is currently serving a 30-month prison term. Ather Ali pleaded guilty to Conspiracy to Defraud the United States on Feb. 12, 2010 and is serving a 37-month prison term.
Sentencing is scheduled for April 23. Chotani faces up to five years in prison and a maximum fine of $250,000. In addition, as part of his plea agreement, he has agreed to pay restitution to the IRS for the losses arising from the tax fraud scheme.