Bakersfield Tax Return Preparer Sentenced for Role in $25 Million Fraud Scheme

Victor Cruz, 41, of Bakersfield, was sentenced today to 18 months in prison for participating in a scheme to submit fraudulent individual federal income tax returns that claimed $25 million in refunds, U.S. Attorney Eric Grant announced.

According to court records, between November 2019 and June 2023, Miguel Martinez, 42, a Mexican national residing in the United States illegally, led a scheme to file thousands of fraudulent tax returns that claimed millions of dollars in refunds. Martinez created fake businesses that reported to the IRS phony wages paid and withholding information for supposed employees. Martinez then filed thousands of individual income tax returns in the names of the supposed employees that claimed the employees were owed refunds based on the phony wages paid and withholding information that had been reported for them.

Cruz helped Martinez carry out the scheme by preparing and filing more than 500 of the fraudulent tax returns. This was approximately 10% to 15% of the total fraudulent tax returns for which Martinez was responsible. Cruz received thousands of dollars in fees from Martinez in exchange for his services.

The IRS actually paid out $2.3 million of the $25 million in refunds that were claimed by the fraudulent tax returns.

Martinez pleaded guilty and, in September 2024, was sentenced to six years in prison.

This case was the product of an investigation by the IRS Criminal Investigation. Assistant U.S. Attorney Joseph Barton prosecuted the case.