Team Leader | California | Income Tax Fraud

There is no effective leader who does not have a team to support them. Just ask Miguel Martinez, who went about stealing millions from the U.S. taxpayer in a scheme that filed thousands of fraudulent individual federal income tax returns that claimed millions of dollars in refunds using stolen identities. And Victor Cruz, the other teammate, helped. Cruz may have even filed the boss’s income tax return. Martinez, a Mexican national, was in the United States illegally.

From November 2019 through June 2023, Martinez used stolen identities to create fake businesses and report phony wage and withholding information for the businesses to the IRS. Martinez then submitted hundreds of individual income tax returns to the IRS in the names of individuals whose identities he had stolen, claiming that those individuals worked for the fake businesses. And tax refunds were owed based on the phony wage and withholding information that had been reported. Cruz, himself, prepared and filed more than 500 of the fraudulent tax returns, which claimed more than $3 million in refunds.

The IRS, in the end, actually paid out $2.3 million of the $25 million in refunds claimed by the fraudulent tax returns. Cruz received thousands of dollars in fees from Martinez in exchange for his services. Martinez pocketed the remainder.

On July 14, 2025, Victor Cruz pleaded guilty to income tax fraud. Martinez had already pleaded guilty and was sentenced to six years in federal prison for income tax fraud and immigration fraud.

Excellent job by the Internal Revenue Service in this case.

Today’s Fraud of The Day is based on article “Bakersfield Tax Return Preparer Pleads Guilty for His Role in $25 Million Fraud Scheme” published by The Sierra Sun Times on July 22, 2025.

Victor Cruz, 40, who was a tax return preparer in Bakersfield, pleaded guilty on Monday, July 14, 2025, to helping Miguel Martinez, a Mexican national who was in the United States illegally, submit fraudulent individual federal income tax returns that claimed $25 million in refunds, Acting U.S. Attorney Michele Beckwith announced.

According to court records, from November 2019 through June 2023, Martinez led a scheme to file thousands of fraudulent tax returns that claimed millions of dollars in refunds and Cruz helped him carry out the scheme. Martinez used stolen identities to create fake businesses and report phony wage and withholding information for the businesses to the IRS.