Four San Angelo tax preparers have been charged with submitting fraudulent tax returns to the IRS, announced Acting U.S. Attorney for the Northern District of Texas Prerak Shah.
On Wednesday, April 14 2021, a federal grand jury indicted Hugo Cesar Granados, the 60-year-old manager of Columbia Tax Service, his adult daughter, Blanca L. Granados, his adult son, Hugo Alberto Granados, and his employee, Saul Garcia-Soto, on one count each of conspiracy to defraud the United States and several counts each of aiding in the preparation of false documents. Hugo Cesar Granados, Blanca Granados, and Hugo Alberto Granados surrendered themselves to IRS – Criminal Investigations and U.S. Marshals on Thursday afternoon. Saul Garcia-Soto remains a fugitive.
According to the indictment, the elder Mr. Granados and his co-conspirators falsified their clients’ individual income tax returns, Forms 1040, in order to inflate the clients’ tax refunds. As a member of the IRS’ Refund Transfer Program, Columbia Tax Service did not charge the taxpayers anything upfront, but took their preparation fee from the refund before the remainder was issued to the taxpayer. Mr. Granados created a training manual that instructed his employees how to file fraudulent tax returns.
Mr. Granados and his co-conspirators allegedly fabricated clients’ Schedule A, itemized deductions, and Schedule C, sole proprietorship profit and loss statements. They routinely claimed the taxpayer owned a business when no such business existed, claimed unreimbursed employee expenses such as travel and per diem, and claimed business expenses related to maintenance, utilities, supplies, insurance, and professional services that were never incurred.
From 2013 to 2017, the conspirators submitted numerous fraudulent tax returns, resulting in an estimated $18 million in tax losses to the government.
“These defendants brazenly fabricated clients’ financial statements and submitted them to the IRS, resulting in artificially inflated refunds,” said Acting U.S. Attorney Prerak Shah. “Conduct like this is a slap in the face to the many hardworking Americans who pay their taxes dutifully every year. We will not stand for tax fraud, especially by authorized tax preparers.”
“These defendants made a profit by falsifying their client’s tax returns without concern of the repercussions and now face the true costs of their actions in court,” said IRS – CI Acting Special Agent in Charge Jerry Gomez of the Dallas Field Office.
An indictment is merely an allegation of criminal conduct, not evidence. All defendants are presumed innocent until proven guilty in a court of law.
If convicted, Hugo Cesar Granados faces up to 14 years in federal prison; Blanca Granados faces up to 14 years; Hugo Alberto Granados faces up to 17 years; and Saul Garcia-Soto faces up to 20 years.
IRS – Criminal Investigations conducted the investigation. The San Angelo Division of the Northern District of Texas is prosecuting the case.