ALEXANDRIA, Va. (WRIC) — A man from California was sentenced on Wednesday, Oct. 5, to 10 years in prison for conspiring with several other people in schemes defrauding the Internal Revenue Service (IRS) and the Paycheck Protection Program (PPP) out of more than $62 million in losses combined.
According to the U.S. Department of Justice, court documents and statements revealed that 55-year-old Quin Ngoc Rudin was working as the secretary, director and chief financial officer of Mana Tax Services, a tax preparation business in the Los Angeles area, when he conspired to commit two schemes using Mana Tax. At the time, Rudin, a convicted felon, was on supervised release for a previous fraud scheme in California.
In the first set of fraud schemes, Rudin conspired with his brother, 59-year-old Thanh Rudin, of Rosemead, Calif., 46-year-old Seir Havana, of North Hollywood, Calif., and others to prepare and file a series of false income tax returns with the IRS on behalf of more than nine professional athletes.
According to the DOJ’s release, the false tax returns reported fake businesses and personal losses to yield refunds that the athletes were not entitled to receive. Rudin also filed “corrected” tax returns from previous years for most of the athletes, the DOJ’s release said. Mana Tax then charged each athlete a fee of 30% of the refunds issued by the IRS as a result of the false tax returns. According to the DOJ, this tax fraud scheme resulted in a total tax loss of more than $19 million.
In the second set of fraud schemes, Rudin and his co-conspirators at Mana Tax, including 49-year-old Milton Estrada, of Fullerton, Calif., prepared and sent false applications for PPP loans, a federal initiative that aims to provide COVID relief funds for struggling businesses, on behalf of small firms, shell companies and other business entities that they managed.
According to the DOJ, Rudin and his co-conspirators filed PPP loan applications for the firms in exchange for 30% of the resulting loan. To conceal this fee from the federal government, Rudin and his co-conspirators asked the firms to pay the fee with cashier’s checks and to write that the checks were related to payroll in the memo line. Additionally, Rudin and his co-conspirators submitted fake tax returns to support the PPP loan applications, which some of the firm owners never saw or approved before Mana Tax filed them, the DOJ’s record shows.
To get fraudulent PPP loans in the name of shell companies and other business entities they controlled, Rudin and his associates provided false information on the loan applications. The DOJ’s release also said that a few of the business entities were not eligible for any PPP loan funds because they did not have any payroll expenses.
The PPP loan schemes cost the U.S. government more than $43 million, according to the DOJ.
Rudin pleaded guilty on May 13, 2022 to one count of conspiracy to defraud the United States and to commit wire fraud, and to one count of wire fraud, the DOJ’s release read.
Rudin’s co-conspirators, including his brother Thanh, Havana and Estrada, also pleaded guilty as part of these schemes and will all be sentenced later this year.