DOJ unveils nationwide tax fraud crackdown involving 76 defendants, nearly $500M in alleged losses

The Justice Department announced a nationwide tax fraud crackdown Wednesday involving 76 defendants and more than $490 million in estimated intended tax losses, including new charges against 31 individuals accused of schemes targeting American taxpayers.

The first-ever National Tax Enforcement Surge brought together 35 U.S. attorneys’ offices and IRS criminal investigators over approximately six weeks. The operation resulted in 23 new charging actions involving more than $350 million in alleged intended tax losses, while another 45 defendants were involved in trials, guilty pleas and sentencings associated with nearly $140 million in estimated intended losses.

“Every dollar stolen through tax fraud is a dollar taken from the American people,” Attorney General Todd Blanche said in a news release “What we uncovered during this concentrated surge is only the tip of the iceberg. The Department of Justice is committed to expanding our investigations and exposing schemes designed to evade accountability, because there is no safe haven for fraudsters.”

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Speaking at Wednesday’s news conference, IRS Criminal Investigation chief Jarod Koopman described the operation as a new enforcement strategy and said similar crackdowns would follow.

“The consolidated actions we are announcing today represent an entirely new approach in our enforcement strategy. Partnering with DOJ to strategically surge resources around a broad range of tax crimes. And although this type of enforcement is the first of its kind, it will not be the last,” Koopman said.

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Among the largest cases highlighted was an alleged fraudulent trust scheme in Texas, where four defendants were charged with promoting tax shelters that prosecutors say concealed more than $1.5 billion in income and caused over $200 million in estimated tax losses.

In Georgia, three Mexican citizens were indicted in connection with an alleged $74 million tax refund scheme involving more than 16,000 U.S. Treasury checks. Prosecutors allege the defendants used Mexican identification documents belonging to other individuals to obtain IRS taxpayer identification numbers and file fraudulent returns.

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Asked during the news conference how much money taxpayers could expect to recover, Assistant Attorney General Colin McDonald acknowledged that fraudulent proceeds are sometimes spent before investigators can retrieve them.

McDonald said the Justice Department is building an asset forfeiture and recovery team to pursue assets allegedly purchased with fraud proceeds, including luxury vehicles and real estate. He did not provide a total recovery figure, noting that some cases remain in their early stages.

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The crackdown follows the Justice Department’s establishment of its National Fraud Enforcement Division in April. Defendants facing criminal charges are presumed innocent unless proven guilty.