Criminal Defense Lawyers

Fresno Tax Fraud Lawyers

Fresno Tax Fraud Lawyers

Marcela Heredia worked at the IRS as a Tax Examiner in Fresno. Her job was examining tax returns – determining if they were legitimate, catching fraud, protecting the tax system. She committed tax fraud for three years instead. The returns she filed weren’t based on her own income. They used the stolen identities of at-risk youths from the Transitional Living Center where she had also worked. The vulnerable teenagers being helped at the shelter became victims of fraud by the person who was supposed to help them get on their feet. Their personal information became the basis for fraudulent returns filed by an IRS employee. Her sentence: six years in federal prison. The tax examiner who was supposed to catch fraud committed fraud using identities stolen from the children society was trying to protect.

The Eastern District of California has seen tax fraud at scales that destroyed careers and lives across the Central Valley. An orthodontist’s wife who forfeited her mansion and BMW after evading $870,000 in taxes. A man who led a $25 million fraud scheme and was found with $750,000 in fraudulent refund checks in his homes. Multiple IRS employees prosecuted for the fraud they were hired to prevent. When federal prosecutors in Fresno bring tax charges, the defendants often include the people hired to protect the tax system – and their sentences reflect the depth of that betrayal.

The IRS Employee Who Stole From At-Risk Youth

Marcela Heredia held two positions that should have made her a protector rather than a predator. She worked at the Fresno Economic Opportunities Commission’s Transitional Living Center until 2014 – a facility designed to help at-risk youths get on their feet. She also worked at the IRS as a Tax Examiner between 2008 and 2014. Both positions gave her access to vulnerable populations and sensitive information. She exploited both.

Heres the hidden connection that made Heredia’s scheme possible. At the Transitional Living Center, she had access to personal information for at-risk youths – Social Security numbers, dates of birth, names, addresses. At the IRS, she understood exactly how to file returns and avoid detection. The combination created a perfect storm for identity theft tax fraud. The children being helped by the shelter became the victims of fraud by someone working there.

For three years, Heredia filed false tax returns using stolen identities of at-risk youths. The refunds generated went to her accounts. She spent the money on entertainment tickets, groceries, rental cars, restaurants, retail shopping, liquor stores, and everyday expenses. The teenagers whose identities she stole had no idea returns were being filed in there names. There tax records were corrupted by fraud committed by someone who was supposed to help them.

On December 12, 2019, a federal jury found Heredia guilty of seven counts of wire fraud, four counts of aggravated identity theft, and one count of making a false tax return. The evidence was overwhelming. The pattern was clear. The IRS Tax Examiner who understood the system better then almost anyone used that understanding to steal from children.

U.S. District Court sentenced Heredia to six years in federal prison. The prosecutor stated that Heredia “spent three years taking advantage of vulnerable kids, stealing their personal information to get their tax refunds to spend on entertainment tickets, groceries, rental cars, restaurants, retail shopping, liquor stores, and other day-to-day expenses.” Six years for the person who exploited both positions of trust simultaneosly. The shelter designed to help at-risk youth and the IRS designed to protect tax integrity both failed these children – becuase the same person worked at both and betrayed both.

For anyone in Fresno whose identity may have been stolen, the Heredia case illustrates the exposure. The people with access to your information can be the people who steal it. The systems designed to protect vulnerable populations can be staffed by people who exploit them. The fraud you dont know about corrupts your tax records for years.

The Orthodontists Wife Lost Her Mansion

Pilar Rose managed her husband’s orthodontics practice in Fresno. The business was successful. They lived in a mansion. She drove a BMW. From the outside, everything looked legitimate. From the inside, she was evading more than $870,000 in federal taxes.

Heres the irony that defines the Rose case. When IRS auditors came to examine the practice’s finances, Rose didnt cooperate. She fabricated false financial statements to match altered checks she had created. She provided the altered checks and false statements to the IRS auditors who were trying to verify what she owed. The person being audited submitted fake documents to the people conducting the audit.

From 2012 through 2015, Rose prepared false financial statements for her husband’s orthodontics practice that significantly underreported profits. The practice was making money. The tax returns showed far less. The difference – more then $870,000 in evaded federal taxes – funded the lifestyle that seemed like legitimate success.

The obstruction made things worse. When auditors asked questions, Rose provided fabricated answers. When they requested documents, she altered them. The audit that should have uncovered discrepancies was met with active deception. The wife who managed the business tried to manage the investigation away.

U.S. District Court sentenced Rose to two years in federal prison for tax evasion and obstructing an IRS audit. But the prison sentence wasnt the only consequence. As part of her plea deal, Rose agreed to forfeit her interest in more then $2.5 million of proceeds from the sale of the mansion she and her husband owned. She also forfeited the BMW. The lifestyle funded by evaded taxes was stripped away.

For professionals in Fresno managing family businesses, the Rose case demonstrates the exposure. False financial statements become evidence. Altered documents become proof of obstruction. The mansion and luxury car that seemed like success markers became forfeit assets. The tax evasion that funded the lifestyle eventualy destroyed it.

Sixty Six Months For Fresno Fraud

Kenneth Shane Patterson of Fresno operated a fraud scheme that combined multiple crimes. Wire fraud. Bank fraud. Tax evasion. The combination generated substantial illegal income. The prosecution generated substantial prison time.

Heres the uncomfortable truth about combined fraud charges. Each crime adds exposure. Wire fraud carries its own penalties. Bank fraud carries additional penalties. Tax evasion adds more. When investigators trace schemes that cross multiple categories, the resulting sentences can be extraordinary. Patterson discovered this when his combined charges produced a 66-month sentence.

The pattern that emerged showed systematic fraud across multiple channels:

• The wire fraud involved electronic transmission of fraudulent information
• The bank fraud involved financial institutions
• The tax evasion involved failure to report illegal income

Each element was seperate but connected. Each element added time.

U.S. District Court sentenced Patterson to 66 months in federal prison – five and a half years. The court ordered $1.9 million in restitution to the IRS. The Fresno man whose fraud crossed categories discovered that categories of crime accumulate rather then overlap. The $1.9 million restitution will follow Patterson permanantly, surviving bankruptcy and attaching to future earnings.

For anyone in Fresno facing exposure across multiple fraud categories, the Patterson case illustrates how sentences compound. Wire fraud plus bank fraud plus tax evasion dosent result in concurrent sentences running together. It results in consequences that stack. The scheme that seemed to cover multiple bases actualy created multiple vulnerabilities that prosecutors exploited.

Twenty Five Million And Two Hundred Stolen IDs

Miguel Martinez led a tax fraud scheme from Bakersfield that totaled $25 million in fraudulent individual federal income tax returns. The scale was extraordinary. The evidence found in his homes when federal agents arrested him was even more so.

Heres what investigators found:

• $750,000 in fraudulent tax refund checks
• Identification cards for more than 200 individuals

The scheme wasnt theoretical – it was documented in the physical evidence sitting in Martinez’s three homes. The $750,000 in checks represented returns already processed. The 200+ IDs represented future fraud potential.

The scheme worked by filing returns in other people’s names using there stolen identities. Each return generated fraudulent refunds. Each refund added to the total. By the time investigators shut the operation down, the IRS had paid out $2.3 million in fraudulent returns. That $2.3 million represented the successful portion of a $25 million attempted fraud.

Martinez’s co-defendant, Victor Cruz, was a tax return preparer in Bakersfield who helped file some of the fraudulent returns. The preparer who should have helped clients file legitimate returns instead helped manufacture fraudulent ones. The professional expertise that should have ensured compliance was weaponized for theft.

U.S. District Court sentenced Martinez to six years in federal prison for leading the scheme. Six years for the man found with $750,000 in fraudulent checks and identification cards for over 200 people. The sentence reflects the scale – $25 million attempted, $2.3 million paid out, and evidence of ongoing fraud found in his residence. The stolen identities create lasting problems for the 200+ people whose information was used without there knowledge.

For anyone in the Bakersfield or Fresno area who suspects there identity may have been used, the Martinez case shows the scale of exposure. Two hundred stolen identities in one scheme. The victims probly dont know returns were filed in there names untill they try to file legitimatly and discover someone already claimed refunds using there information. The cleanup takes years. The fraud creates problems that persist long after the perpetrator goes to prison. The identities Martinez stole represent real people whose tax records and credit histories may be corrupted for years to come.

Multiple IRS Employees Multiple Schemes

The Heredia case wasnt isolated. The Eastern District of California has prosecuted multiple IRS employees for tax fraud – revealing a pattern of insider corruption in the Fresno area.

Yolanda Castro worked for the IRS for approximately 20 years. Her positions included tax examiner and contact representative. She was trusted. She was experienced. She was arrested on 10 counts of tax fraud and making false statements. Two decades of service ended with a federal indictment.

Deena Vang Lee of Fresno was another IRS employee prosecuted for fraud. After a three-day trial, a federal jury found her guilty of three counts of wire fraud, two counts of aggravated identity theft, five counts of preparing and presenting false and fraudulent returns, and three counts of making and subscribing a false and fraudulent tax return. The employee whose job was examining returns for fraud was convicted of committing fraud herself.

Heres the system revelation these cases expose. IRS employees have database access that enables fraud at scales impossible for outsiders. They understand how returns are processed. They know what triggers alerts. They can manipulate systems from inside. The security designed to protect taxpayer information becomes a vulnerability when employees exploit there access.

For anyone in Fresno who filed returns processed by employees later convicted of fraud, the exposure persists. The returns you filed were handled by people who abused there positions. The information you provided was accessible to people who stole from others. The system you trusted to process your returns contained people who exploited that trust. The IRS employees who were basicly given keys to the system used those keys to steal from it – and from the taxpayers who trusted the system to protect there information.

The pattern of IRS employee prosecution in Fresno raises uncomfortable questions about internal controls. How did Heredia steal identities from at-risk youth for three years without detection? How did Castro work for 20 years before being charged? The access that enables employees to do there jobs also enables employees to commit fraud. The database designed to process returns becomes a tool for identity theft when the wrong people have access.

Californias Highest Tax Creates Highest Exposure

California has the highest state income tax in the nation – up to 13.3% for high earners. Unlike Florida or Texas with no state income tax, California has BOTH state AND federal tax fraud enforcement. The California Franchise Tax Board has its own Criminal Investigation Bureau. The agents are fully sworn peace officers who can execute search warrants and make arrests.

Heres what that means practicaly. A single fraud scheme can trigger investigation by the California Franchise Tax Board AND the IRS simultaneosly. Cases can be prosecuted at the state level, the federal level, or both. The FTB and IRS freely share information – a federal audit can trigger state prosecution and a state audit can trigger federal prosecution.

The combined penalty exposure is extraordinary. Unlike the IRS, which typically caps fraud penalties at 75%, California has more aggressive penalty structures in some instances. Combined federal and state fraud penalties can reach 150% before interest. The highest tax rates in the nation create the highest incentive for evasion – and California responds with the most aggressive prosecution.

For Fresno residents, this system means more investigators looking for fraud:

• The California Franchise Tax Board pursues violations of state tax law
• Federal prosecutors handle IRS cases
• Both agencies coordinate
• Both share audit results
• Both prosecute aggressivly

The dual exposure means defendants can face charges from multiple jurisdictions for the same underlying conduct.

The FTB Criminal Investigation Bureau operates diferently then most state tax agencies. The special agents are fully sworn peace officers with arrest powers. The state agency that processes your tax return has its own enforcement arm that operates like any police department. The Central Valley with its concentration of agricultural businesses and service industries creates opportunites for cash-based fraud that eventualy become federal and state prosecutions.

Defense Strategy In Fresno

If your facing tax fraud exposure in Fresno, the calculus involves understanding how the Eastern District operates.

The Heredia case shows that IRS employee status provides access that enables fraud – and sentences that reflect the betrayal of trust. The Rose case shows that obstruction of audits compounds tax evasion into longer sentences and asset forfeiture. The Patterson case shows that combined charges across fraud categories result in accumulated sentences. The Martinez case shows that evidence found during arrest – $750,000 in checks, 200+ stolen IDs – becomes proof of scale.

Heres what these cases have in common. By the time defendants faced prosecution, there options had narrowed dramaticaly. The investigations were complete. The evidence was gathered. The schemes were documented. The 90% federal conviction rate means fighting the charges rarely succeeds. The only questions were conviction and sentencing.

The time to address tax fraud exposure is before any of that happens. Voluntary disclosure programs exist. Coming forward before the IRS finds you creates opportunities to resolve issues civily – with penalties and interest, but potentialy without prison. And in California, addressing issues proactivly can prevent state prosecution from developing alongside federal exposure.

If an investigation has already begun, damage control becomes the priority. Understanding what investigators know. Protecting against self-incrimination. Navigating toward the least damaging outcome possible in a state with the highest income tax rates and most aggressive prosecution.

Why Fresno Specificaly Creates Exposure

Fresno’s position in California’s Central Valley creates particular tax fraud exposure. The IRS presence in the area where multiple employees have been prosecuted for fraud. The agricultural and service businesses that generate cash income subject to underreporting and that are extremly difficult to audit completly. The professional practices like orthodontics where successful operations generate tax obligations that some choose to evade.

The Heredia case reveals how IRS employees can exploit both professional access and previous employment at organizations serving vulnerable populations. The Rose case shows how successful businesses can become vehicles for tax evasion when managers choose to underreport income. The Martinez case demonstrates how industrial-scale identity theft schemes can operate untill investigators trace the pattern.

And Californias highest-in-nation state income tax creates exposure that exceeds any other state. The California Franchise Tax Board pursues violations of state tax law. Federal prosecutors handle IRS cases. Both systems are active. Both coordinate regularely. Combined fraud penalties can reach 150%.

If theres tax fraud exposure in your situation – returns prepared by someone now under investigation, identity theft youve discovered, income you didnt report – the time to address it is before investigators start looking. Not after the investigation begins.

Heres the thing about prosecution in Fresno. The Eastern District of California has shown through the Heredia case, the Rose case, the Martinez case, and dozens of others that it pursues tax fraud aggressivly. The sentences can be extraordinary – six years for Heredia, six years for Martinez, 66 months for Patterson. The 90% federal conviction rate means most people charged get convicted. Your exposure persists untill you address it. The dual prosecution system California creates means the question isnt just wheather you face federal charges – its wheather you face state charges too. Thats the uncomfortable reality here in California.