SANTA ANA, California – An Orange County man pleaded guilty today to federal criminal charges that he used his tax preparation company to knowingly file false tax returns and cheat the United States out of nearly $5 million.
Michael Hung Lee, 70, of Garden Grove, entered his plea before United States District Judge David O. Carter. Lee pleaded guilty to one count of conspiracy to aid and assist in the preparation of false tax returns.
According to his plea agreement, from 2014 to March 2018, Lee was a tax preparer who owned and operated 1040 U.S. Tax Center, Inc., a Garden Grove-based company. During that time, Lee knowingly participated in a conspiracy where he and others fraudulently filed federal individual income tax returns on behalf of their clients in order to obtain false refunds from the IRS.
On these tax returns that he prepared and filed, Lee willfully and fraudulently claimed Schedule D capital losses that he knew his clients never approved and for which they were unqualified, the plea agreement states. The false declarations of capital losses reduced his clients’ listed taxable income. As a result, the federal government incurred a tax loss of at least $4,917,035, according to the plea agreement.
Judge Carter scheduled a November 16 sentencing hearing, at which time Lee will face a statutory maximum sentence of five years in federal prison.
On June 15, Mylinh Thi Lee, 50, of Garden Grove, who is Michael Lee’s daughter and also was a tax preparer at 1040 U.S. Tax Center, pleaded guilty to one count of aiding and assisting in the preparation of false tax returns. She will face a statutory maximum sentence of three years in federal prison at her sentencing hearing, which is scheduled for October 26.
This matter was investigated by IRS Criminal Investigation.
This case is being prosecuted by Assistant United States Attorney Jennifer L. Waier of the Santa Ana Branch Office.