Oct. 10—Two Bakersfield residents were indicted by a federal grand jury last month on suspicion of being involved in a $25 million tax refund fraud scheme, the U.S. Department of Justice announced Tuesday.
Victor Cruz, 38, and Miguel Martinez, 39, were each charged with conspiracy to defraud the United States and submission of false claims to the Internal Revenue Service. Martinez was additionally charged with identity theft.
According to a news release from the U.S. Attorney's Office, Eastern District of California, the two defendants worked with others to file hundreds of bogus federal income tax returns claiming more than $25 million in refunds. It said the filings used stolen identities to create fake businesses that never paid the wages reported, and that the IRS issued many checks based on the fraudulent returns.
The release said Cruz was a tax preparer in Bakersfield who filed "a significant number" of the fake returns. It noted Martinez had more than $750,000 in frauduent refund checks and ID cards for more than 200 people.
Martinez was arrested in June. Cruz was arrested Monday in Los Angeles upon his return from Mexico.