tax evasion and avoidance
Rafael Ramos, of Orlando, Florida, was sentenced to 27 months in prison for promoting a scheme to file false documents with the IRS to fraudulently obtain large tax refunds.
Ramos pleaded guilty on Sept. 5, 2023, to conspiring to defraud the United States, filing a false tax return for himself, and aiding and assisting in the preparation of a false tax return. He had initially been indicted on Jan. 7, 2021, by a grand jury charged with conspiracy, filing a false tax return for himself and his wife, and six counts of aiding and assisting in preparing and filing false tax returns for his clients.
According to court documents and statements, from January of 2015 through July 2016, Ramos recruited clients and prepared tax returns on their behalf that falsely claimed banks and other financial institutions had withheld large amounts of taxes from income, entitling them to refunds from the IRS.
As a procedural note, between July 2021 and March 2023, Ramos participated in reviews to determine his competency for trial, including an in-patient evaluation at a Bureau of Prisons facility. On March 8, 2023, the Magistrate Judge issued a Report and Recommendation, which the Court accepted and adopted, ruling that Ramos was “competent to proceed to trial and to assist properly in his defense.”
The Scheme
As part of the scheme, Ramos worked with his co-conspirators to recruit clients, including members of his Bible study group, sometimes hosting meetings at his home and office. He falsely told clients they were entitled to tax refunds based on their mortgages. Ramos and his co-conspirators used previously filed tax returns and mortgage documents to prepare fraudulent Forms 1099-MISC purporting to come from the mortgage lenders—these forms were filed with the IRS. The forms falsely reported that the mortgage lenders paid the clients large amounts of income, and that substantial taxes were withheld and paid over to the IRS.
As a next step, Ramos and his co-conspirators worked to prepare Forms 1040 and 1040X reporting the withholdings in order to claim large tax refunds. Ramos instructed the clients to sign and file the returns, which were falsely designated as self-prepared.
Ramos personally obtained a fraudulent refund of $93,079 by filing a false 2013 amended tax return for himself and his wife. He subsequently promoted the scheme to others. He charged some clients an advance fee to begin the process and then required them to pay him 10%-20% of their tax refund, a step the IRS consistently deems a red flag. Ramos directed clients to pay him fees in cash.
Eventually, the scheme faltered, and the IRS attempted to recover the erroneously issued tax refunds. In response, Ramos explained to his clients how to obstruct the IRS from collecting the erroneous refunds, including establishing trusts to protect funds from being levied by the IRS. He charged some clients approximately $1,500 for this service.
Ramos also provided clients with frivolous correspondence to send to the IRS, instructed clients to lie to the IRS and say they self-prepared their returns, and told clients to move funds from their bank accounts to prevent the IRS from recovering the refunds through bank levies.
Co-Conspirators
Four co-conspirators were sentenced before Ramos. Ramos’ co-conspirator Iran Backstrom was sentenced to 105 months, Mehef Bey was sentenced to 132 months, Yomarie Febres was sentenced to 51 months, and Aaron Aqueron was sentenced to 51 months in prison.
Sentencing
In addition to 27 months in prison, U.S. District Judge Paul G. Byron ordered Ramos to serve two years of supervised release and to pay approximately $594,685 in restitution to the United States. That represents the remaining funds that the IRS was unable to collect, excluding interest and penalties, out of the $1,151,163 initially paid out in fraudulent refunds.
IRS-CI
IRS-CI investigated the case.
IRS-CI, the sixth-largest law enforcement agency in the U.S, is the criminal investigative arm of the IRS, responsible for conducting financial crime investigations like tax fraud, narcotics trafficking, money laundering, public corruption, healthcare fraud, and identity theft. While other federal agencies also have investigative jurisdiction for money laundering and some bank secrecy act violations, IRS is the only federal agency that can investigate potential criminal violations of the tax code.
