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Description: Alexandria, Virginia criminal law lawyer represented Defendant charged with defraud the Internal Revenue Service (IRS) and the Paycheck Protection Program (PPP).
Quin Ngoc Rudin, 55, a convicted felon, was the Secretary, Director and Chief Financial Officer of Mana Tax Services, a tax preparation business in the Los Angeles area. Rudin engaged in a conspiracy to commit two fraud schemes using Mana Tax while on supervise release.
First, Rudin conspired with his brother, Thanh Rudin, 59, of Rosemead, California, as well as Seir Havana, 46, of North Hollywood, California, and others to prepare and file 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. Rudin also filed amended tax returns for most of the athletes for prior years to correct what he 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. Rudin’s tax fraud scheme caused a total tax loss of more than $19 million.
Second, Rudin and his co-conspirators, also including Milton Estrada, 49, of Fullerton, California, at Mana Tax also prepared and submitted false applications for PPP loans on behalf of small businesses, shell companies, and other business entities they controlled. Rudin and his 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 conceal the 30% fee from the government, Rudin and his co-conspirators directed the businesses to pay the co-conspirators with cashier’s checks and to note on the memo lines that the checks were related to payroll. To obtain fraudulent PPP loans on behalf of shell companies and other business entities they controlled, Rudin and 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. The fraud loss to the U.S. government stemming from the PPP scheme exceeded $43 million.
Rudin committed these crimes while he was on supervised release for another fraud scheme in California. He pleaded guilty on May 13 to one count of conspiracy to defraud the United States and to commit wire fraud, as well as to one count of wire fraud. Three other co-conspirators, including Rudin’s brother, Thanh Rudin, Seir Havana and Milton Estrada also pleaded guilty as part of this conspiracy. Thanh Rudin and Havana are scheduled to be sentenced on Nov. 9. Milton Estrada is to be sentenced on Dec. 21.
"I commend the hard work of the Eastern District of Virginia, the Tax Division, IRS Criminal Investigation and the Federal Bureau of Investigation,” said Kevin Chambers, Director of COVID-19 Fraud Enforcement. “The department will continue to aggressively pursue all who exploited the pandemic as a means to enrich themselves at the expense of those for whom pandemic relief funds were intended.”
“Quin Ngoc Rudin defrauded the Treasury of tens of millions of dollars by securing grossly inflated tax refunds and fraudulently obtaining COVID relief loans with fabricated tax returns,” said Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division. “Tax preparers should know that whether their clients are professional athletes or the neighbor down the block, they need to do their jobs honestly and professionally, or face the consequences.”
“Between the complex and calculated tax fraud scheme and the PPP fraud to steal funds designated to provide relief to Americans suffering from the pandemic, this defendant’s crimes resulted in a staggering loss in the tens of millions,” said U.S. Attorney Jessica D. Aber for the Eastern District of Virginia. “Today’s sentence demonstrates the swift and exacting justice that awaits anyone who attempts to steal funds from the U.S. Government and taxpayers. This result is in no small part due to the diligence of the investigative agents on this case, who reacted decisively to identify the scheme and recover significant portions of defrauded taxpayer funds.”
“Today, Quin Ngoc Rudin was sentenced for his fraudulent scheme to exploit a program designed to provide to those in need during the COVID-19 pandemic. It is unacceptable for anyone to prioritize their own greed above others and steal funds from the American taxpayers. Rudin and his co-conspirators spent their fraudulently obtained funds to further their scheme, including traveling on private jets to portray themselves as successful business owners,” said Special Agent in Charge Wayne A. Jacobs of the FBI Washington Field Office Criminal Division. “The FBI and our partners will work to bring those to justice who attempt to enrich themselves at the expense of others and take advantage of government programs designed to aid businesses, people, and our economy during a time of need.”
“Honest taxpayers are fed up with crooks like Quin Rudin who defrauded a government program meant to help those in need to line their pockets while skirting their tax obligations," said Special Agent in Charge Darrell Waldon of the IRS-Criminal Investigation Washington, D.C. Field Office. "Rudin and his conspirators devised a scheme to steal from a CARES Act loan program to fund their lifestyles. His actions not only caused negative ramifications to those financially connected to him, but also the honest taxpayer when he and his conspirators committed significant tax fraud violations.”
The United States recovered over $15 million of the fraud proceeds. Rudin’s restitution amount will be ordered at a later date.
U.S. Attorney Jessica D. Aber 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 Darrell J. Waldon 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.
Conspiracy to Defraud the United States and to Commit Wire Fraud
Outcome: Minute Entry for proceedings held before District Judge Anthony J. Trenga: Sentencing held on 10/5/2022 for Quin Ngoc Rudin for Counts 1s and 2s. U.S. appeared through David Zisserson, Kimberly Pedersen, and Kimberly Shartar. Defendant appeared with counsel, Brittany Davidson and Geremy Kamens. the Court overrules all objections but accepts the 108-135 month guideline range as proposed in the Plea Agreement. Defendant sentenced to: BOP for 60 Months as to Count 1 and 60 Months as to Count 2, to run consecutively; 3 years SR as to each Count 1 and 2, to run concurrently, with special conditions; $200 SA. Defendant remanded. (Court Reporter R. Montgomery)(dzir) (Entered: 10/05/2022)