Tax Preparer Rodrigo Pablo “Paul” Lozano, a.k.a. “El Profe,” 61, has been convicted of conspiracy to file false refund claims and for having signed returns claiming more than $53 million in fraudulent refunds. Just another example of the fact: Don’t Mess with the IRS!
Before the IRS was able to identify and stop the scheme, it had already paid out more than $23 million of refunds to the defendant and his co-conspirators.
According to the evidence at trial, Lozano’s scheme was based on his applying for ITINs. Co-conspirators provided Lozano with fake ID documents, such as birth certificates and Matricula cards supposedly issued by the Mexican government, which Lozano used to obtain ITINs in the names shown on the fake documents.
He then used the ITINs to file three years of income tax returns based on wage and withholding information contained in fake W-2s; he also listed three or four fictitious dependents in whose names Lozano also applied for ITINs.
All of the scheme’s returns requested refunds, with most in the $3,000 to $4,000 range, which they requested by claiming the ACTC, with the number of dependents and wage amounts on the returns falsified to maximize the ACTC.
Lozano submitted more than 12,000 false returns in an 18-month period in 2011 and 2012 – during which time his employees told him at least five times that the identity and W-2 documents looked suspicious. The IRS sent hundreds of warning notices to Lozano stating that the returns and W-2s were invalid. Despite the repeated warnings, Lozano continued to direct his employees to file the fraudulent tax returns.
Lozano split the refunds with his co-conspirators, including having employees count out tens of thousands of dollars in cash in a bathroom located next to his office space. Lozano operated his prep business, Ayuda, by renting space from businesses that catered to Hispanic clients. He went by the name “El Profe,” as he was a teacher before he began preparing tax returns.
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