Tax Preparer Admits Filing Thousands of False Returns in Multi-Million Dollar Tax Return Scam

Assistant U.S. Attorneys Joseph J.M. Orabona (619) 546-7951 or Alexandra Foster (619) 546-6735

NEWS RELEASE SUMMARY– December 2, 2015

SAN DIEGO – The owner of a tax preparation business pleaded guilty today in federal court, admitting that she filed more than 4,000 false income tax returns with the Internal Revenue Service in order to obtain more than $7 million in bogus refunds.

Melissa Ann Vega, also known as Lisa Vega, was a local tax preparer and owner of L&T Works, a tax return preparation business on Miramar Road. She entered her plea to charges of conspiracy to file false, fictitious, and fraudulent claims for federal tax refunds, tax evasion and aggravated identity theft before U.S. Magistrate Judge Bernard G. Skomal.

According to her plea agreement, Vega, conspired with others from at least December 2009 through April 2015 to submit thousands of false income tax returns to the IRS in order to fraudulently obtain tax refunds to which Vega, her co-conspirators, and her clients were not entitled.  In carrying out her scheme, Vega falsified her clients’ tax returns without their knowledge or consent.  As part of the conspiracy, Vega claimed thousands of dollars in false education expenses and tax credits for which her clients were not qualified.

Vega told her co-conspirators and employees that they should maximize clients’ refunds by filing for a $4,000 education credit, even though the client did not attend school for that tax year. To conceal her role in the fraud, Vega intentionally omitted her name and tax return preparer identification number on the false tax returns she prepared for her clients. In total, Vega’s fraud caused the IRS to pay more than $7 million in artificially-inflated tax refunds based solely on the false education credits. Moreover, Vega admitted that she and her co-conspirators stole the identities of other persons, including minors, and used them on the false tax returns in order to further inflate the amount of the tax refund paid by the IRS.  

Vega did not shy away from personally profiting from her fraudulent scheme.  In addition to charging her clients between $150 and $200 per return, Vega also admitted that she stole more than $300,000 in false tax refunds from her clients by directing their refunds into bank accounts that she controlled.  Vega spent this money for her own personal benefit.  Vega also admitted that she evaded her own income taxes and filed false personal tax returns in which she fraudulently claimed withholding credits, education credits, and tax credits for minor dependents that she did not support and were not related to her. According to court documents, Vega evaded more than $156,000 in taxes due to the IRS for tax years 2009 through 2013. 

The plea agreement also sets forth a forfeiture provision whereby Vega, a previously convicted felon, agreed to the surrender of several firearms seized from her residence during the execution of a search warrant in April 2014, including a sawed-off shotgun, shotgun shells, a 9mm handgun, and 9mm ammunition. Vega’s husband, Jamie Lang, pleaded guilty to possessing the unregistered sawed-off shotgun and is scheduled to be sentenced in this case before U.S. District Judge Jeffrey T. Miller on December 18, 2015 at 9:00 a.m. In addition, Vega consented in her plea agreement to the forfeiture of approximately $18,600 in cash, also seized during the search warrant, which represented proceeds of her tax fraud. 

Furthermore, as part of her plea agreement, Vega agreed to be permanently enjoined from preparing or filing federal income tax returns for anyone other than herself. A civil complaint will be filed against Vega, and a permanent injunction will be entered to prevent Vega from acting as a tax preparer in the future.   

Vega was released on bond in this case on January 28, 2015. Although the court informed her not to commit another federal crime, Vega once again began filing false tax returns with the IRS within days of her release. Without the clients’ knowledge, Vega fraudulently inflated or created credits and deductions to maximize her clients’ false returns. The IRS uncovered her fraud, and Vega was arrested on February 25, 2015. In furtherance of her conspiracy, Vega agreed with Deanna Dave (charged in Criminal Case No. 15CR2715-JM) to misrepresent to the grand jury that Dave was the owner and paid-return preparer for the tax returns filed in February 2015. In truth, Vega continued as the owner of her tax preparation business and prepared the false tax returns which she filed for her clients. On November 17, 2015, Dave pleaded guilty to making a false declaration before the grand jury, and her sentencing is scheduled for February 5, 2016 before Judge Miller.

“Tax return preparers owe a duty to their clients to prepare tax returns that are accurate and comply with the law,” said U.S. Attorney Laura Duffy. “Tax return preparers who defraud the IRS out of millions of dollars, intentionally falsify tax returns, and steal the identities of minor dependents breach the public’s trust and undermine confidence in the tax system. This Office and our law enforcement partners will vigilantly pursue allegations of such misconduct in order to protect the community and the public.”

With a new tax return filing season right around the corner, U.S. Attorney Duffy reminded the public to always review a copy of any tax return prepared and filed on their behalf and to be skeptical of tax preparers that offer to obtain substantial tax refunds.

Erick Martinez, Special Agent in Charge for IRS Criminal Investigation commented: “As we approach tax filing season, those who might consider committing refund fraud and identity theft should be aware of the extremely negative consequences of doing so,” said IRS Criminal Investigation's Special Agent in Charge Erick Martinez. “IRS Criminal Investigation will continue to vigorously pursue those who unjustly enrich themselves by preparing false income tax returns.”

“The Secret Service remains committed to vigorously investigating and seeking prosecution of those individuals who commit identity theft.  We are grateful for the efforts of the U.S. Attorney’s Office and our federal partners at the Internal Revenue Service in this investigation,” said David Murray, Special Agent in Charge, United States Secret Service, San Diego Field Office.

Separately, three other defendants have entered guilty pleas admitting their roles in the tax fraud conspiracy.  Earlier this year, co-conspirators Tammie Cowles, Stephen Elliott, and Justin Vega entered guilty pleas to conspiracy to file false claims for tax refunds. Co-conspirator Justin Vega is scheduled to be sentenced before U.S. District Judge Jeffrey T. Miller on January 22, 2016, and co-conspirators Tammie Cowles and Stephen Elliott are scheduled for sentencing before Judge Miller on March 4, 2016. 

Vega is scheduled to be sentenced for her crimes before U.S. District Judge Jeffrey T. Miller on March 4,  2016 at 9:00 a.m.