8 Illinois residents arrested for conspiring to commit tax and mail fraud

ROCKFORD, Ill. — Eight Illinois residents, who all have connections to a tax-preparation business, were arrested Thursday following federal indictments alleging the group conspired to defraud the U.S. government by filing numerous false income tax returns.

These indictments and arrests resulted from an investigation by the following agencies:  U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), Internal Revenue Service’s Criminal Investigation (IRS-CID), and the U.S. Postal Inspection Service (USPIS).

Patty Cordoba, 42, of Crystal Lake, Illinois, and seven others were arrested and each charged with one count of conspiracy to defraud the United States by obtaining payment after filing false claims for tax refunds, and at least one count of mail fraud.

Cordoba is the owner of Patty’s Tax Service (PTS) in McHenry, Illinois. Three of her employees and four clients were included in the federal indictment. The indictment also seeks forfeiture of $642,514.

The federal indictments allege the conspirators participated in a mail fraud scheme to prepare and file more than 200 false personal federal income tax returns for tax years from 2006 through 2011.  The defendants were also charged with conspiring between March 2009 and May 2012 to defraud the United States by making false claims for tax refunds, and obtaining payments.

Indictments against the following Illinois residents were unsealed Thursday following their arrests:

• Patty Cordoba, 42, of Crystal Lake;
• Mario Cordoba, 47, of Crystal Lake, PTS employee and Patty’s husband;
• Luisa Carbajal, 52, of Marengo, PTS employee;
• Alicia Arvalo, 48, of Poplar Grove, PTS employee;
• Olga Lidia Diaz-Hernandez, 45, of McHenry, PTS client;
• Victor Hernandez, 41, of McHenry, PTS client;
• Veronica Sanchez-Barradas, 39, of McHenry, PTS client; and
• Cesar Besiche, 48, of McHenry, PTS client. 

All of the defendants pleaded not guilty at their arraignments in federal court Jan. 22 in Rockford, Illinois.  The defendants were ordered to remain in custody pending detention hearings before a U.S. magistrate.

According to the indictment, Patty Cordoba, and her employees, Mario Cordoba, Carbajal and Arevalo, prepared more than 200 fraudulent personal federal income tax returns for Diaz-Hernandez, Hernandez, Sanchez-Barradas, Besiche and others, claiming materially false amounts of income and credits for tax years 2006-2011.  The fraudulent tax returns were filed with the IRS and falsely claimed more than $600,000 in tax refunds.  As part of the scheme, the Cordobas, Carbajal and Arevalo allegedly prepared fraudulent returns for other filers using information provided by Diaz-Hernandez, Hernandez, Sanchez-Barradas, Besiche and others.

The indictment also alleges the defendants created fraudulent Individual Taxpayer Identification Number applications in order to increase the number of dependents listed on a particular taxpayers’ return, thus increasing the amount of fraudulent tax refunds. Another part of the scheme involved artificially inflating the amount of refunds by fraudulently claiming Child Tax Credits for dependents that live in other countries.

Each count of mail fraud carries a maximum penalty of 20 years in prison and a maximum fine of $250,000 fine.  Each count of conspiracy to defraud the United States by obtaining payment of false claims carries a maximum penalty of 10 years in prison and a maximum fine of $250,000.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines; restitution is mandatory.

The public is reminded that an indictment contains only charges and is not evidence of guilt.  The defendants are presumed innocent until proven guilty and are entitled to a fair trial at which the government has the burden of proving guilt of each defendant beyond a reasonable doubt.