SACRAMENTO, Calif. — Paola Bedoy, 65, of Stockton, was sentenced today by U.S. District Judge Kimberly J. Mueller to five years in prison for eight counts of preparing fraudulent tax returns, U.S. Attorney McGregor W. Scott announced.
According to court documents and evidence presented at a jury trial, for years Bedoy ran a tax preparation business in Stockton called Javez Enterprises. Bedoy repeatedly encouraged and assisted her clients in preparing fraudulent federal income tax returns by claiming earned income credits and child tax credits based upon dependents who were not eligible for those credits. For example, Bedoy falsely listed a child as disabled when he was not, put dependents on returns that her clients didn’t even know to fraudulently boost refunds, and repeatedly sought tax credits based on noncitizen children living in Mexico who Bedoy knew did not qualify for those tax credits. In one instance caught on video, Bedoy suggested the fraud to a client so that the client could afford to pay her fee and then tripled her fee to that client. Bedoy also admitted to investigators that she “bought” children to add to clients’ tax returns to inflate their refunds, and sometimes kept the inflated portion of the refunds for herself.
While Bedoy initially claimed she committed some of this fraud to help her family, during the time she committed the fraud, Bedoy gambled extensively at area casinos, losing over $130,000 during a period that she reported only $67,000 in income on her own personal federal income tax returns. Bedoy testified in her own defense at trial and received a sentencing enhancement for obstruction of justice after the court determined that Bedoy gave materially false testimony. In the aggregate, Bedoy filed hundreds of tax returns with the IRS seeking refunds in the millions of dollars.
Bedoy was ordered to report to begin service of her sentence by 2:00 p.m. on Oct. 19. This case was the product of an investigation by Internal Revenue Service Criminal Investigation. Assistant U.S. Attorney Christopher S. Hales prosecuted the case.