Tax Fraud Scheme Haunts Halfway House in San Leandro

It was double jeopardy for law enforcement and the Internal Revenue Service when the residents of a halfway house in San Leandro were made victims of tax fraud by its manager Juancho Tango Andres. The manager used a fraudulent tax refund scheme to support his drug habit by filing false income tax returns with the IRS from 2010 to 2012.

A former halfway house manager confesses his guilt

Andres, along with his cohort Sean Cowgill, created a document named ID-Doc for the purpose of gathering personal information of individuals such as name, DOB, income, number of dependents and SSN, which was enough to file tax returns on their behalf.

He used recruiters to find people from rehabilitation centers and food lines from Hayward, East Oakland, and San Leandro and extract information from them using the ploy that they were potential candidates for a stimulus program being sponsored by embattled and struggling President Obama whose own trillion dollar stimulus helped America very little but did add more to the national debt.

Intentionally, Andres targeted low income and homeless people from this area to be recruited for the tax refund scheme. He told them that they would receive a tax refund even if they did not work a single day of the year. During this time Guadalupe Nieves and Andres were managers of the halfway house in San Leandro whose address was entered in the tax returns including for those people who had never lived there.

The refunds were sent to a Well Fargo Bank account jointly held by Andres and Nieves, who then shared this ill gotten gain with the owner of the fraudulent refund. They set up meeting places in Starbucks parking lots with paid security to distribute the money.

For every refund Sean Cowgill the author of the false tax refund scheme was paid $50, under the cover of franchise fee per refund received from IRS.

47 year old Andres of San Francisco has been charged with one count of wire fraud and one count of identity theft both. He pleaded guilty to wire fraud and will be brought before the Honorable Yvonne Gonzalez Rogers in Oakland for sentencing on 2nd April, 2015. He is likely to face a maximum sentence of 20 years and a fine of $25,000 for each count of wire fraud.

Changes in tax laws in the coming year

One of the lessons learned from the Andres fraud is that the IRS never really looks closely at a small tax payer’s demographic profile. Yet, when they do, all hell breaks loose and the tax payer realizes that it is probably a better idea to keep abreast of changes in tax laws and make the required adjustments in the family budget to avoid paying penalties. If you are not sure set up an appointment with a tax attorney and clarify your doubts.

Avoid tax fraud by paying and save on taxes at the same time

The first thing a tax attorney will look at is if you have a health insurance policy. It is mandatory for all Americans or else the IRS will impose a steep penalty of $94 per person or 1% of household income whichever is greater. In 2015, this penalty has grown significantly to $325 per person or 2% of total household income because of government overspending which has grown out of control under President Obama’s watch. The federal government is drowning in spending programs that are not logical and they are desperate for funds to pay for them.

While savings are to be made from changes in 401(k) limits and flexible spending accounts limits, standard deduction still remains the most crucial area for tax planning so you can end up in a lower tax bracket in 2015.

Andres should do no less than ten years in prison, perhaps twenty.