LOS ANGELES– A North Hollywood man has been sentenced to 48 months in federal prison for his role in a tax fraud conspiracy scheme that fraudulently claimed more than $1.2 million in fraudulent tax refunds.

Antonio Jerome Cook, 37, received the prison sentence yesterday from United States District Judge George H. King. In addition to the prison term, Judge King ordered Cook to pay $537,309 in restitution to the Internal Revenue Service.

Cook pleaded guilty in October 2015 to one count of conspiracy to commit tax fraud.

According to documents filed with the court, starting in late 2008 or early 2009, Cook, along with two co-conspirators, developed a tax fraud scheme in which the defendants prepared and filed fraudulent tax returns for individuals. The fraudulent returns were filed on behalf of individuals who agreed to have the defendants prepare their tax returns (apparently without knowledge of the fraud scheme), as well as individuals whose identities were stolen.

The fraudulent tax returns indicated that the taxpayers were employed by Picaso Fashions, a business established by Cook in name only. In fact, Picaso Fashions did not have any employees and the taxpayers were never actually employed by Picaso.  The tax returns indicated that Picaso Fashions had excessively withheld income tax for each taxpayer, and each fraudulently filed tax return sought a tax refund the taxpayers were not entitled to receive.

The scheme related to Picaso Fashions resulted in the filing of 69 false individual federal tax returns during 2009 that claimed tax refunds totaling $621,589.

In addition to Picaso Fashions, Cook and a co-conspirator independently established other companies to serve as fraudulent employers in tax schemes, according to court documents. Specifically, Cook established at least five other companies to perpetrate similar tax fraud schemes. For example, Cook filed an additional 72 tax returns listing a fictitious employer, Arkitek Entertainment Group, which fraudulently claimed $486,659 in refunds.

In total, Cook filed 182 fraudulent returns between 2009 and 2010 seeking tax refunds totaling $1,225,901. The IRS paid full or partial tax refunds on 81 of these returns and suffered actual losses of $537,309.

“As we enter the 2016 tax season, it is important that we continue to work with IRS criminal investigators to ensure the honesty and integrity of the tax system,” said United States Attorney Eileen M. Decker. “Identifying fraudulent claims against the government and prosecuting those responsible for illegally filing false tax returns protects all taxpayers and helps ensure the fairness of the entire system.”

Co-conspirator Rebecca Magruder, 37, of Dallas, Texas was sentenced in January to 18 months in prison and ordered to pay restitution of $119,671 for her role in the scheme.

The investigation into Cook and Magruder was conducted by IRS Criminal Investigation.

USAO – California, Central

Topic: Financial FraudTax                    Updated March 8, 2016

Central District of California DOJ / 16-045 / March , 2016