Second and Third Defendants Sentenced to Prison for Multimillion Dollar Schemes Involving Preparing False Tax Returns for Professional Athletes and PPP Loan Fraud
ALEXANDRIA, Va. – Two California men have been sentenced to prison in a conspiracy to defraud the Internal Revenue Service (IRS) and the Paycheck Protection Program (PPP), a federal loans initiative designed to help businesses pay their employees and meet expenses during the COVID-19 pandemic.
According to court documents and statements made in court, Thanh Rudin, 58, was a principal of Mana Tax Services, a tax preparation business in the Los Angeles area. His coconspirator, Seir Havana, 46, was the company’s Vice President/Director and Chief Executive Officer. The defendants engaged in two fraud schemes using Mana tax. First, they prepared and filed with the IRS a series of false income tax returns on behalf of at least nine professional athletes. The false tax returns reported fictitious business and personal losses to generate refunds the athletes were not entitled to receive. They also filed amended tax returns for most of the athletes for prior years to correct what conspirators falsely characterized as “errors” made by their previous accountants. Mana Tax charged the athletes a fee of 30% of the resulting refunds issued by the IRS. The tax fraud scheme caused a total tax loss of more than $19 million.
Second, the defendants prepared and submitted false applications for PPP loans on behalf of small businesses, shell companies, and other business entities they controlled. The co-conspirators prepared fraudulent PPP loan applications for these firms in exchange for a fee of 30% of the resulting loan. The co-conspirators submitted fabricated tax returns to support the PPP loan applications, and some of the business owners never saw their loan applications before Mana Tax filed them. To obtain fraudulent PPP loans, the co-conspirators grossly inflated the number of employees and monthly payroll costs claimed on the applications. Some of the businesses were not eligible for any PPP loan funds at all because they did not have any payroll expenses.
During the investigation, the government seized more than $11.8 million from bank accounts containing PPP loan fraud proceeds controlled by the conspirators. In addition, Havana surrendered cashier’s checks worth approximately $5.6 million, representing a portion of the fees charged to professional athletes for the preparation of their false tax returns, and a portion of the fees charged for obtaining fraudulent PPP loans. The two schemes resulted in total losses of more than $44 million.
Havana, was sentenced today to 42 months in prison. Thanh Rudin was sentenced on February 10 to 34 months in prison. Thanh Rudin’s brother, Quin Rudin, was sentenced in October 2022 to 10 years in prison for his role in the scheme.
Jessica D. Aber, U.S. Attorney for the Eastern District of Virginia; Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division; Special Agent in Charge Wayne A. Jacobs of the FBI Washington Field Office Criminal Division; and Special Agent in Charge Kareem Carter of the Washington, D.C. Field Office, IRS-Criminal Investigation made the announcement after sentencing by Senior U.S. District Judge Anthony J. Trenga.
The U.S. Attorney’s Office for the Central District of California and U.S. Small Business Administration provided assistance with the investigation.
Assistant U.S. Attorneys Kimberly M. Shartar and Kimberly R. Pedersen for the Eastern District of Virginia and Assistant Chief David Zisserson of the Tax Division prosecuted the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:22-cr-116.
Originally published at https://www.fbi.gov/contact-us/field-offices/washingtondc/news/second-and-third-defendants-sentenced-to-prison-for-multimillion-dollar-schemes-involving-preparing-false-tax-returns-for-professional-athletes-and-ppp-loan-fraud
originally published at HUMAN RIGHTS - USA DAILY NEWS 24