SANTA ANA, Calif. (CN) - The leader of the biggest tax fraud of its kind in history was ordered to pay $2.9 million in restitution in addition to the 14-year sentence he's serving.
Arturo S. Ruiz, 55, of Moreno Valley, was CEO of the Old Quest Foundation, and head of a ring that filed more than 400 fraudulent tax returns seeking more than $250 million in refunds.
Fifty-five people were indicted two years ago. Seven have been convicted, 36 pleaded guilty, two have agreed to plead guilty, and eight await trial. One is a fugitive and one was acquitted.
Ruiz was convicted in January of conspiracy and 41 counts of false claims.
"The scheme run out of Old Quest was the largest tax refund fraud in history involving misuse of Original Issue Discount tax forms," the U.S. Attorney's Office said in a statement.
Ruiz's No. 2 man, Francisco Mendoza, was convicted with him but died last month just before his sentencing.
The U.S. attorney describes Ruiz and his henchmen as "tax defiers."
"Ruiz fraudulently told Old Quest customers they each could receive hundreds of thousands of dollars in tax refunds by accessing 'secret government accounts' through a process that included the filing of IRS Forms 1099-OID," prosecutors said in the statement. "Taxpayers who signed up were required to pay Old Quest fees as high as $10,000, and they were required to promise to 'donate' to Old Quest 25 percent of any tax refunds they received."
The crooks prepared and filed false tax forms seeking hundreds of thousands or millions of dollars in refunds - sometimes more than one refund per customer.
The IRS caught most of the frauds before paying the money, prosecutors said, but paid some of them, including one for $1,192,653.
Ruiz made another $2 million in fees from his customers. When the IRS sent letters questioning some tax returns, Ruiz told his suckers not to worry, that they IRS was just trying to "intimidate" them because it "did not want to pay."
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