Fake IRS Agent Sentenced to 4 Years in $1.8M Fraud Scheme

A Mexican national was sentenced earlier this week to 48 months in prison for operating a scheme in which he claimed to be an IRS officer and misrepresented to victims that he was able to obtain hundreds of thousands of dollars for them from a fictitious IRS program.

Court documents say that Francisco Ivan Velazquez falsely claimed to be an employee of the IRS and claimed to his victims that he could secure large monetary payments for them from the IRS.

Velazquez asserted that these funds were available from a purported IRS program that allowed people who had previously lost a home to foreclosure to recoup money by applying to the IRS and filing certain documents. He advised the victims that, in exchange for a fee, he would submit an application for them to recover the funds. In some instances, Velazquez then helped present a false tax return to the IRS on behalf of a victim claiming the victim had federal tax withholdings of $100,000 or more and requested the withholdings be refunded.

Velazquez’s criminal scheme sought at least $1.8 million from the IRS.

“The defendant pretended to be an IRS agent and preyed on victims – many of whom were non-native English speakers – who struggled to pay their home mortgages,” said First Assistant United States Attorney Sigal Chattah for the District of Nevada. “He exploited his victims’ financial vulnerabilities and stole hard-earned money from over a dozen victims.”

The government recommended a sentence of 96 months in prison.

"This case serves as a reminder of the lengths fraudsters will go to exploit vulnerable individuals for their own financial gain,” said Phoenix Field Office Acting Special Agent in Charge Scott Brown. “By inventing fake government programs and impersonating IRS officials, Velazquez built a false sense of trust to steal hard-earned money from unsuspecting victims. The IRS will never charge an upfront fee to process a form or secure a refund, nor do we make initial contact with taxpayers via social media or unsolicited text messages."

Velazquez was convicted at trial of three counts of wire fraud, one count of aiding the presentation of a false tax return, and two counts of impersonating an IRS officer.

The jury did not return a verdict on four counts of aiding in the preparation of false tax returns.

In addition to the term of imprisonment, U.S. District Judge Jennifer A. Dorsey ordered Velazquez to pay about $199,198.52 in restitution to the victims of his crimes.

First Assistant United States Attorney Sigal Chattah for the District of Nevada, IRS Criminal Investigation Phoenix Field Office Acting Special Agent in Charge Scott Brown; Special Agent in Charge Krystofor Proev for the Treasury Inspector General for Tax Administration (TIGTA) made the announcement.

IRS Criminal Investigation and TIGTA investigated the case. Trial Attorneys John C. Gerardi and Thomas W. Flynn of the Department of Justice’s Criminal Division, Tax Section, prosecuted the case with assistance from the U.S. Attorney’s Office for the District of Nevada.

On April 7, the Department of Justice announced the creation of the National Fraud Enforcement Division (Fraud Division). The Fraud Division is laser-focused on investigating and prosecuting those who commit fraud against the American people. The Department’s work to combat fraud supports President Trump’s Task Force to Eliminate Fraud, a whole-of-government effort chaired by Vice President J.D. Vance to eliminate fraud, waste, and abuse within Federal benefit programs.