Tax Preparer Accused of $1M in IRS Fraud
A tax preparer from Lemon Grove was arrested Monday in Arizona on suspicion of carrying out a scheme to steal Social Security numbers, file false tax returns and defraud the Internal Revenue Service, authorities reported.
IRS agents took Cynthia Lozano, 31, into custody in Phoenix, where she will make her first appearance in federal court on Tuesday, according to the U.S. Attorney’s Office in San Diego.
According to a grand jury indictment, the suspect used her business, CLozano Income Tax, to submit fraudulent federal income tax returns seeking bogus refunds.
Starting in 2010, Lozano allegedly made false statements that prompted the IRS to issue refunds under EIC provisions, which allow for a refundable federal income-tax credit for low- to moderate-income individuals and families as a way to offset the burden of Social Security taxes and to provide an incentive to work.
If a taxpayer’s EIC exceeds the amount of taxes actually owed, it results in the IRS paying a refund to the taxpayers, who claim and qualify for the credit.
According to charging documents, Lozano targeted more than 200 victims by filing fraudulent IRS 1040 forms in the their names. The taxpayers frequently were unaware that Lozano had used their Social Security numbers, thus also becoming victims of aggravated identity theft.
As a result, Lozano allegedly received over $1 million worth of fraudulent refunds from the IRS, which she laundered through an array of bank accounts and used, in part, to buy 20 properties in and around Phoenix.
Lozano’s indictment seeks forfeiture of the real estate to recompense the government and to prevent her from reaping a financial benefit from her alleged crimes.