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Ex-IRS Agent Turned Tax Preparer Nailed for Laundering

Steven Martinez, a former Internal Revenue Service agent who has been running a tax preparation business, was arrested today (April 15) and charged with 49 counts including mail fraud, aggravated identity theft, making false tax returns, and money laundering. The indictment charges Martinez with stealing more than $11 million in tax payments that should have been sent to the IRS. Martinez would present his clients with completed tax returns and then persuade them to write checks payable to a trust account rather than to the IRS or California Franchise Tax Board. Then, according to the indictment, he steered the money into his own accounts which he used to fuel an extravagant lifestyle, which included a multi-million dollar home in Ramona.

Also today, John Leonard Camilo pleaded guilty using various tricks to defraud the IRS out of $800,000 between 2004 and 2010 on behalf of clients. Among other things, Camilo created false businesses which allegedly suffered losses.

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Steven Martinez, a former Internal Revenue Service agent who has been running a tax preparation business, was arrested today (April 15) and charged with 49 counts including mail fraud, aggravated identity theft, making false tax returns, and money laundering. The indictment charges Martinez with stealing more than $11 million in tax payments that should have been sent to the IRS. Martinez would present his clients with completed tax returns and then persuade them to write checks payable to a trust account rather than to the IRS or California Franchise Tax Board. Then, according to the indictment, he steered the money into his own accounts which he used to fuel an extravagant lifestyle, which included a multi-million dollar home in Ramona.

Also today, John Leonard Camilo pleaded guilty using various tricks to defraud the IRS out of $800,000 between 2004 and 2010 on behalf of clients. Among other things, Camilo created false businesses which allegedly suffered losses.

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the yearly arrests just in time to make anyone think agin about cheating on their taxes. be it payers or tax "mechanics"

April 16, 2011

It's getting a little late this year to scare potential cheaters. Also, the feds work on these cases a long time before they make charges. Best, Don Bauder

April 16, 2011

Did this ex-IRS agent really think his methods would work and that he'd escape detection? If anyone should know how to beat the IRS at its own game, it would be an insider. There are probably dozens of victims, the people who thought they were in the good graces of the IRS, who now have their own set of issues with the IRS. And the IRS is not a pleasant group when they are disputing what you've done. You would be better off trying to deal with a mob enforcer in some ways, than an IRS agent who has the full weight of the law on his/her side.

April 16, 2011

I would think Martinez thought he would get away with it -- and he believed that based on his experience working with the agency. Some of the greatest scams and abuses come from lawyers, in particular, who work for a government agency and then leave government employ and defend crooks trying to dodge that agency's rules. I have written much about how Wall Street law firms control the SEC by offering huge salaries to SEC attorneys around the time the law firms' clients are being investigated by the agency. A case I have cited often: the law firm of Latham & Watkins wrote a white paper claiming that board members of Peregrine, particularly John Moores, were not responsible for the scam. (Others denounced the L&W paper as simply a whitewash.) The SEC lawyer handling the Peregrine scam bought into the L&W report -- then went to work for L&W. Best, Don Bauder

April 16, 2011

The SEC lawyer handling the Peregrine scam bought into the L&W report -- then went to work for L&W.

That should be banned. No work for anyone you regulated until a 5 year grace period has passed. This was a Ross Perot campaign issue.

This is why we are a Banana Republic, this is an obvious and blatant fraud.

April 16, 2011

So was Peregrine. Some management people got criminally punished, but the board escaped by paying a mere $55 million to settle civil suits. Moores was chairman and effectively one of the top persons, if not THE top person, in the company. Best, Don Bauder

April 16, 2011

Wow! That's all. Wow!

April 16, 2011

Also, Wow spelled backwards. Best, Don Bauder

April 16, 2011

and the IRS audits and build an interest laden scam against individuals all the time...those bastards!!!

i hope he get 50 years!!!

April 16, 2011

He won't. Best, Don Bauder

April 16, 2011

Invariably, these stories are publicized around tax time. Its propaganda and fear mongering courtesy of the U.S. government.

The real tax cheats are the U.S. corporations and the largest shareholders of them. These annual stories about naughty tax payers make me yawn.

April 16, 2011

I agree that the biggest tax cheats are US corporations, followed by the heads of hedge funds and Wall Street firms and executives. But we have a corporate socialist economy and government. Only the wee get caught, generally. Best, Don Bauder

April 16, 2011

Invariably, these stories are publicized around tax time. Its propaganda and fear mongering courtesy of the U.S. government.

The real tax cheats are the U.S. corporations and the largest shareholders of them. These annual stories about naughty tax payers make me yawn.

April 16, 2011

"Invariably, these stories are publicized around tax time. Its propaganda and fear mongering courtesy of the U.S. government."

not according to Don.

April 18, 2011

Ponzi is right that these stories are publicized around tax time, but this one came out pretty late to frighten those who file on time. Best, Don Bauder

April 18, 2011
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