A California tax return preparer pleaded guilty on Monday to helping an illegal alien fraudulently claim $25 million in refunds.
The illegal alien, Mexican national Miguel Martinez, “led a scheme” between November 2019 and June 2023 “to file thousands of fraudulent tax returns that claimed millions of dollars in refunds,” according to a Department of Justice (DOJ) press release.
Bakersfield Tax Return Preparer Pleads Guilty for His Role in $25 Million Fraud Scheme https://t.co/sYHa314Wsb
— EDCAnews (@EDCAnews) July 14, 2025
He was assisted in this scheme by tax return preparer Victor Cruz, 40.
“Martinez used stolen identities to create fake businesses and report phony wage and withholding information for the businesses to the IRS,” according to the DOJ.
“Martinez then submitted hundreds of individual income tax returns to the IRS in the names of individuals whose identities he had stolen, claiming that those individuals worked for the fake businesses and were owed tax refunds based on the phony wage and withholding information that had been reported,” the press release continues.
Cruz, meanwhile, prepared over 500 fraudulent tax returns for Martinez for $25 million total in refunds, though the IRS only paid out around $2.3 million before the scheme was unearthed.
In exchange for his services, Cruz received “thousands of dollars in fees.”
Cruz is now scheduled to be sentenced on Nov. 17 and faces a statutory maximum penalty of 10 years in prison and a $250,000 fine.
“The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables,” according to the DOJ.
Martinez, for his part, already pleaded guilty and was sentenced to six years in federal prison.
All this comes months after the tax preparation company Jackson Hewitt was caught handing out flyers teaching illegal aliens how to collect up to $14,000 in tax refunds.
WOW Jackson-Hewitt Tax Services is handing out flyers to illegal immigrants in New York City
“The flyer indicates that illegal immigrants can get up to $14,000 IN TAX RETURNS BASED ON HOW MANY CHILDREN THEY HAVE”
They want US TO PAY ILLEGALS
— Wall Street Apes (@WallStreetApes) March 29, 2025
According to independent journalist Savanah Hernandez, representatives for the company were handing out the flyers outside an illegal alien shelter in New York City.
The flyers specifically showed instructions on how illegal aliens using an Individual Taxpayer Identification Number could collect money using the Child Tax Credit.
When confronted about this, Jackson Hewitt blamed a specific franchise and promised to investigate.
“The IRS requires anyone with a tax obligation to file a tax return, and tax returns filed with Jackson Hewitt comply with the U.S. tax code,” a spokesperson said to Newsweek. “The integrity and legal compliance of Jackson Hewitt’s tax preparation services are routinely monitored and essential in everything we do.”
“We are reviewing the specific situation that occurred on March 28 with the independently owned and operated franchisee involved to ensure they met our high compliance standards,” the spokesperson added.
Michael Ryan, a finance expert, wasn’t particularly impressed with their statement.
“What strikes me about Jackson Hewitt’s response is what they’re not saying,” he told Newsweek. “They’re hiding behind ‘compliance with tax code’ without addressing whether their franchisees are actively marketing potentially misleading refund amounts.”
“The truth about taxes for immigrants is complicated. Yes, people without legal status can and should file taxes using ITINs, but there’s a world of difference between filing obligations and refund eligibility. Many tax preparers conveniently blur these lines during tax season,” he added.
Billionaire Elon Musk also responded to the controversy.
“IRS refund fraud payments are one of several means used by the Democratic Party to attract and retain illegal immigrants in the USA,” he wrote in a lengthy tweet posted to X. “That’s why they are so opposed to @DOGE stopping this!”
“The Democratic Party is aiding and abetting fraudulent government payments to illegals in order to establish a permanent one-party majority nationally, just like they did in California. The more you look into it, the crazier it gets,” he added.
IRS refund fraud payments are one of several means used by the Democratic Party to attract and retain illegal immigrants in the USA. That’s why they are so opposed to @DOGE stopping this!
The Democratic Party is aiding and abetting fraudulent government payments to illegals in… https://t.co/1t45vSnhce
— Elon Musk (@elonmusk) March 30, 2025
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Author: Vivek Saxena
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